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ProblemSet1

Do either Problem 3 or Problem 4 from section 2.2. Try to follow the data guide by Gentzkow & Shapiro by automating the data processing steps, keeping files and code organized, and, of course, using Git/GitHub.

Feel free to use or modify the file structure in this repository, which in turn follows G&S's suggestions.

Problem 3

Either replicate Tables 1 and 2 from DGR (2011) using the 2007 Survey of Consumer Finances, or update their tables 1 and 2 using the more recent wave of the survey from 2013. Follow the methodology as described in their text. Plot the Lorenz curves for earnings, income and wealth.

Problem 4

Replicate a part of Table 27 from DGR using the PSID between 2001 and 2007 by constructing the transition matrix for either earnings or income or wealth. For the outcome variable you picked, plot the Lorenz curves for 2001 and 2007 in one graph, and compute the Gini for those years.

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