zwages1”Homework #1A hard copy is due in class on Tuesday, February 9, 2016Thursday February 11, 2016. Late homeworks are not accepted. If you cannot make it to lecture, you should arrange to hand in your homework ahead of time. For data, you must use the August 2015 CPS data set.Several questions refer to the Basic Sample: persons whose age is in the 21-27 (inclusive) range, who are working at least 40 hours per week.1. Consider the Basic Sample only. Create standardizations (z-scores) of for the variables: wages, age, education, and hours. Display the resulting histograms and statistics next to the unstandardized versions. Describe the main ways the pairs of graphs are similar, and the main ways they are different.2. Start with the entire data set and construct the variable “zwages1” by (i) restricting your sample to the Basic Sample, and then (ii) forming the z-scores of the wages. Now start with the entire data set and construct “zwages2” by (i) forming the z-scores of the wages, and then (ii) restricting your sample to the Basic Sample. Compare the resulting histogram and statistics, and compare the first observation in the two cases. Explain the differences.3. Determine the following proportions of persons in the Basic Sample:a. Women;b. Persons making over 50k;c. Persons who are women making over 50k;d. Persons who are women or who make over 50k;e. The proportion of women among the persons making over 50k;f. The proportion of women who make over 50k;[Hint:Construct the relevant binary (indicator) variables, and them both, and then use N-way tabulation. Intuitively, you will be calculating Pr[A], Pr[B], Pr[A and B], Pr[A or B], Pr[A|B], and Pr[B|A].]4. The 2016 federal poverty level for family of size 1 (i.e., just you living alone) is $11,770. For a family of size 2 or 3 it is $15,930 and $20,090 respectively. Construct a graph that displays the breakdown of people’s wages (ignoring other possible sources of income) in terms of positive and negative percentages (or proportions) above or below the poverty level for a family of size 1. Assuming that each individual is the sole earner for their family, do the same for families of size 2 and 3 (i.e., assume each individual is the sole earner for a family of the appropriate size). Repeat this, but for the Basic Sample only.5. Restrict your sample to people working at least 40 hours per week (no other constraints). Construct and compare the “histogram and statistics” of wages of 20-25 year olds, 26-35 year olds, 36-45 year olds, 46 – 55 year olds, 56 – 65 year olds, 66 – 70 year olds, and 71+ year olds. What do you notice about wages? Give a short explanation of what you think accounts for the differences in wages. [Copy and paste your histograms and statistics onto a single sheet of paper.]#################################2015 AUGUST CPS CODE BOOK#################################STATEGeography-FIPS state codeWith the following Ranges:1 AL2 AK4 AZ5 AR6 CA8 CO9 CT10 DE11 DC12 FL13 GA15 HI16 ID17 IL18 IN19 IA20 KS21 KY22 LA23 ME24 MD25 MA26 MI27 MN28 MS29 MO30 MT31 NE32 NV33 NH34 NJ35 NM36 NY37 NC38 ND39 OH40 OK41 OR42 PA44 RI45 SC46 SD47 TN48 TX49 UT50 VT51 VA53 WA54 WV55 WI56 WYMETROSIZEMetropolitan Statistical Area SizeWith the following Ranges:0 Not Identified or NonMetropolitan2 100,000 – 249,9993 250,000 – 499,9994 500,000 – 999,9995 1,000,000 – 2,499,9996 2,500,000 – 4,999,9997 5,000,000+METROAREACombined Statistical Area FIPS CodeWith the following Ranges:000 Nonmetropolitan or Not Identified118 Appleton-Oshkosh-Neenah, WI176 Chicago-Naperville-Michigan City, IL-IN-WI (part)178 Cincinnati-Middletown-Wilmington, OH-KY-IN (part)184 Cleveland-Akron-Elyria, OH (part)206 Dallas-Fort Worth, TX (part)212 Dayton-Springfield-Greenville, OH (Part)216 Denver-Aurora-Boulder, CO220 Detroit-Warren-Flint, MI260 Fresno-Madera, CA266 Grand Rapids-Muskegon-Holland, MI (part)268 Greensboro-Winston-Salem-High Point, NC (part)272 Greenville-Anderson-Seneca, SC (part)288 Houston-Baytown-Huntsville, TX (part)290 Huntsville-Decatur, AL294 Indianapolis-Anderson-Columbus, IN (part)304 Johnson City-Kingsport-Bristol, TN-VA (part)348 Los Angeles-Long Beach-Riverside, CA356 Macon-Warner-Robins-Fort Valley, GA (part)376 Milwaukee-Racine-Waukesha, WI378 Minneapolis-St. Paul-St. Cloud, MN-WI (part)408 New York-Newark-Bridgeport, NY-NJ-CT-PA (part)428 Philadelphia-Camden-Vineland, PA-NJ-DE-MD (part)450 Raleigh-Durham-Cary, NC (part)472 Sacramento–Arden-Arcade–Truckee, CA-NV (part)482 Salt Lake City-Ogden-Clearfield, UT (part)488 San Jose-San Francisco-Oakland, CA500 Seattle-Tacoma-Olympia, WA548 Washington-Baltimore-Northern Virginia, DC-MD-VA-WV (part)715 Boston-Worchester-Manchester, MS-NH-CT-ME (part)720 Bridgeport-New Haven-Stamford, CTHOUSEHOLDHousehold-total # of membersWith the following Ranges:0:16 RangeEDUCATIONDemographics-highest level of school completedWith the following Ranges:-1 Not in Universe31 Less Than 1st Grade32 1st,2nd,3rd Or 4th Grade33 5th Or 6th Grade34 7th Or 8th Grade35 9th Grade36 10th Grade37 11th Grade38 12th Grade No Diploma39 High School Grad-Diploma Or Equiv (ged)40 Some College But No Degree41 Associate Degree-Occupational/Vocationl42 Associate Deg.-Academic Program43 Bachelor’s Degree(ex:ba,ab,bs)44 MASTER’S DEGREE(EX:MA,MS,MEng,MEd,MSW)45 Professional School Deg(ex:md,dds,dvm)46 DOCTORATE DEGREE(EX:PhD,EdD)HOURSLabor Force-# hours actually worked at all jobsWith the following Ranges:-1 Not in Universe0:198 RangeHISPANICDemographics- hispanic/non-hispanic originWith the following Ranges:1 Hispanic2 Non-HispanicMARITALDemographics-marital statusWith the following Ranges:-1 Not in Universe1 Married – Spouse Present2 Married-Spouse Absent3 Widowed4 Divorced5 Separated6 Never MarriedSEXDemographics-sexWith the following Ranges:1 Male2 FemaleASIANDemographics Detailed Asian SubgroupWith the following Ranges:-1 Not in Universe1 Asian Indian2 Chinese3 Filipino4 Japanese5 Korean6 Vietnamese7 Other AsianAGEDemographics – age topcoded at 85, 90 or 80 (see full description)With the following Ranges:0:90 RangeRACEDemographics- race of respondentWith the following Ranges:01 White only02 Black only03 American Indian, Alaskan Native Only04 Asian only05 Hawaiian/Pacific Islander Only06 White-Black07 White-AI08 White-Asian09 White-HP10 Black-AI11 Black-Asian12 Black-HP13 AI-Asian14 AI-HP15 Asian-HP16 W-B-AI17 W-B-A18 W-B-HP19 W-AI-A20 W-AI-HP21 W-A-HP22 B-AI-A23 W-B-AI-A24 W-AI-A-HP25 Other 3 Race Combinations26 Other 4 and 5 Race CombinationsWEEKLYWAGESEarnings-weekly earnings,amount-recodeWith the following Ranges:-1 In Universe, Met No Conditions To Assign0.0:2884.61 Range