*Thyne, Clayton
*Intro to Stats, Chapter 5 examples

	clear
	set mem 80m
	cd [your directory]

*  NOTE: the above command asks you to change the directory.  The directory will depend on how you've set up
*  the folders on your computer.  For example, my command is...
*  cd F:\teaching\Fall_2008\PS572-401-baby_stats\do_file_directories\chapter5
*  This is necessary so you know where stata is saving things.

	use "http://www.uky.edu/~clthyn2/intro_stats/data_set_1.dta"

****Part 1: correlations
	*play around with some correlations using data_set_1.dta

****Part 2: dangers of correlation coefficients

*example 1: outliers
	corr cap milper
	scatter cap milper
*solution 1:  drop outliers
	corr cap milper if milper<2000 & cap<.04
	scatter cap milper if milper<2000 & cap<.04

*solution 2:  transform data
	hist cap
	gladder cap
	gen lcap=log10(cap)

	hist milper
	gladder milper
	gen lmilper=log10(milper)

	corr cap milper
	corr lcap lmilper
	scatter lcap lmilper