Stata

Module 2, Topic 1:
Creating Time Series
Plots and Charts in Stata
Overview
• In this topic, students will learn how to create visual
representations of time series data using Stata.
Visualizing time series data is essential for identifying
trends, seasonal patterns, and outliers, and it plays a
crucial role in data exploration and presentation.
Basic Time Series Plotting
• tsline is the main command for plotting time series data
in Stata. It produces a line graph showing the changes
in a variable over time.
• tsline variable_name
• tsline sales
Plotting Multiple Time Series
• You can plot multiple time series on the same graph to
compare variables.
• tsline variable1 variable2
• tsline sales revenue
Customizing Time Series Plots
• You can enhance your plots by adding titles, labels, and
changing colors.
• tsline variable, title("Your Title") xtitle("X-Axis Title")
ytitle("Y-Axis Title") lcolor(blue)
• tsline sales, title("Sales Over Time") xtitle("Month")
ytitle("Sales in USD") lcolor(blue)
Identifying Trends and Seasonality in
Plots
• Visual inspection of the time series plot helps in
identifying long-term trends, seasonal patterns, and
unusual values (outliers).
• Steps:
1. Use the plot to see whether the data is moving
upwards or downwards (trend).
2. Look for repeating patterns over time (seasonality).
3. Identify sharp peaks or drops (potential outliers).
 Module 2, Topic 2:
Identifying and Handling
Missing Values and Outliers
Overview
• In this topic, students will learn how to identify and
address missing values and outliers in time series data.
Handling these issues is essential for accurate modeling
and forecasting, as gaps in data or extreme values can
skew results.
Identifying Missing Values in Time
Series
• Missing data can occur when no observation is recorded
for certain time points. It is important to identify these
gaps before conducting any analysis.
Command: misstable summarize
• This command provides an overview of the number of
missing values in each variable
• misstable summarize
• misstable summarize sales
Checking for Gaps in Time Series
• Stata provides a specific command to check for gaps in
time series data: tsreport.
Handling Missing Values
• Once missing data is identified, it can be handled using
various techniques
• 1. Interpolation: Filling missing values by estimating
intermediate values. Command: ipolate
• ipolate variable time_variable, gen(new_variable)
• ipolate sales date, gen(sales_interp)
• 2. Excluding Missing Values: Dropping rows with
missing values. Command: drop if missing(variable)
• drop if missing(sales)
Identifying and Handling Outliers
• Outliers are extreme values that differ significantly from
the rest of the dataset. They can distort time series
models if not properly handled.
Identifying Outliers: summary
statistics
• Use summary statistics to detect unusual values.
• Command: summarize
• summarize variable, detail
• summarize sales, detail
Visual Inspection
• Visualizing the data is another way to identify outliers.
• tsline variable
• tsline sales
Handling Outliers
• Outliers can either be removed or transformed. One
common method is capping or trimming, which involves
setting a threshold for values.
• replace sales = 6000 if sales > 6000
 Module 2, Topic 3: Data
Transformation and
Normalization Techniques
Overview
• This topic covers essential data transformation and
normalization techniques used in time series analysis.
Transforming data helps to stabilize variance, make the
data stationary, and improve the performance of
statistical models. Normalization ensures that data from
different scales are standardized for comparison and
further analysis.
Log Transformation
• Log transformation is one of the most common
techniques used to stabilize variance and deal with
exponential trends in time series data. It is especially
useful when data spans several orders of magnitude or
exhibits exponential growth.
Command: gen
• The gen command generates a new variable that is the
log-transformed version of the original variable.
• gen log_variable = log(original_variable)
• gen log_sales = log(sales)
Differencing to Remove Trends
• Differencing is a technique used to remove trends from
time series data, making it stationary. A stationary
series has constant mean and variance over time, which
is often required for time series modeling.
• gen diff_variable = D.original_variable
• gen sales_diff = D.sales
• The D. operator in Stata calculates the first difference of
a variable. Higher-order differences can be calculated
using D2., D3., etc.
Smoothing
• Smoothing is a technique used to remove short-term
fluctuations and highlight long-term trends. Moving
averages are commonly used for this purpose.
• Command: tssmooth ma - The tssmooth ma command
applies a moving average smoother to time series data.
• tssmooth ma new_variable = original_variable,
window(#)
• tssmooth ma sales_smooth = sales, window(3)
Normalization
• Normalization rescales data to fit within a specific
range, often between 0 and 1. This is particularly useful
when comparing time series that have different scales.
• Command: egen with std
• egen new_variable = std(original_variable)
• egen sales_norm = std(sales)
Min-Max Scaling:
• Rescaling to a range between 0 and 1 can also be
achieved through manual computation.
• summarize sales
• gen sales_minmax = (sales - r(min)) / (r(max) - r(min))
Box-Cox Transformation
• The Box-Cox transformation is a more flexible
transformation technique that stabilizes variance and
normalizes data, especially when log transformation is
not sufficient.
• Command: ladder - This command helps identify the
best transformation for the data.
• ladder variable
• ladder sales
Module 2, Topic 4: Resampling
and Aggregating Time Series
Data
Overview
• n this topic, students will learn how to resample time
series data to different time frequencies (e.g., from daily
to monthly) and how to aggregate data by calculating
summary statistics over specific time periods.
Resampling and aggregation are useful when working
with datasets at varying levels of granularity or when
needing to summarize data over time intervals.
Resampling Time Series Data
• Resampling refers to changing the frequency of the time
series data. This could involve moving from high-
frequency data (e.g., daily data) to lower-frequency data
(e.g., monthly or quarterly) or vice versa.
• Upsampling: Changing to a higher frequency (e.g., from
monthly to daily).
• Downsampling: Changing to a lower frequency (e.g.,
from daily to monthly).
Command: collapse
• The collapse command in Stata is used to aggregate
data by time period, allowing for resampling and
summarizing time series data.
• collapse (stat) variable_name, by(time_variable)
• stat: This is the statistic to compute (e.g., sum, mean,
median).
• variable_name: The variable to summarize.
• time_variable: The time variable by which to aggregate
data.
• collapse (mean) sales, by(month)
Aggregating Data Over Time
Intervals
• Aggregation involves calculating summary statistics
(such as sum, mean, median, etc.) over specified time
intervals. This is useful for generating reports or
analyzing patterns over different time scales (e.g., total
monthly sales, quarterly averages).
Common Aggregation Statistics
• Sum: Total values over a time period.
• Mean: Average values over a time period.
• Median: The middle value in the time period.
• collapse (sum) sales, by(year)
Resampling Data to Higher
Frequency