- Laura Whiting

# Plot a Set of p-values From a Monte Carlo Simulation to Compare with the Nominal Significance

Stata has a command called **simulate** which is used to facilitate Monte Carlo simulations in Stata. Monte Carlo simulations are a method of analysis for solving computational or mathematical problems. You could use a Monte Carlo simulation to evaluate a theoretical probability. For example, we know theoretically that when you toss a coin there is a 50% chance you will get heads and a 50% chance you will get tails. To test whether this is observed in the real world you want to toss a coin 5000 times and record the outcome of each toss. However, it is very time consuming to do this. A Monte Carlo simulation offers a way to perform hundreds of thousands of individual coin tosses very quickly. For more information check out this __Tech Tip__ where we use the Monte Carlo Method to try and determine the true value of Pi.

Once you have used **simulate** to generate a large number of simulated p-values, you can plot these visually use the **simpplot** command in Stata. This allows you to compare your actual values against the nominal significance values.

To create this plot in Stata, you first need to download the **simpplot** command from the SSC, which you do in Stata using the following command:

To generate this graph in Stata, use the following commands: