There may be times that you would like to convert a
continuous variable into groups.  For example, you might want to convert
a continuous reading score that ranges from 0 to 100 into 3 groups (say low,
medium and high).  You can use egen with the cut() function
to do this quickly and easily, as illustrated below. We will illustrate this
with the hsb2 data file with a variable called
write that ranges from 31 to 67.

use https://stats.idre.ucla.edu/stat/stata/notes/hsb2, clear

summarize write

    Variable |       Obs        Mean    Std. Dev.       Min        Max
-------------+--------------------------------------------------------
       write |       200      52.775    9.478586         31         67

We can use egen with the cut() function to make a variable called
writecat that groups the variable
write into the
following 4 categories.

30 up to (but not including) 40
40 up to (but not including) 50
50 up to (but not including) 60
60 up to (but not including) 70

egen writecat = cut(write), at(30,40,50,60,70)

The tabstat command below is used to verify that the data are grouped as we expected.  We can see that when
writecat is in the lowest category (30) that write ranges from 31 to
39, and so forth as we expect, e.g., the values when writecat is in category
30 correspond to write having values of 30 up to (but not including) 40.

tabstat write, by(writecat) stats(min max)

Summary for variables: write
Group variable: writecat 

writecat |       Min       Max
---------+--------------------
      30 |        31        39
      40 |        40        49
      50 |        50        59
      60 |        60        67
---------+--------------------
   Total |        31        67
------------------------------

Here we use the same command but
our last category is from 50 to 60.  As you see, it generates a missing
value because there are a number of values that are 60 or higher and thus outside of the range we specified.  This
shows that if there are values outside of the range you provide, those will be
assigned a missing value.

egen writecat2 = cut(write), at(30,40,50,60)
(53 missing value generated)

If we use the icodes
option, cut() will create integer codes 0, 1, 2 and so forth.  In
the example below, you can see that it created codes 0, 1, 2 and 3.

egen writecat3 = cut(write), at(30,40,50,60,70) icodes
tabstat write, by(writecat3) stats(min max)

Summary for variables: write
Group variable: writecat3 

writecat3 |       Min       Max
----------+--------------------
        0 |        31        39
        1 |        40        49
        2 |        50        59
        3 |        60        67
----------+--------------------
    Total |        31        67
-------------------------------

If you use the label option (which
automatically implies icode), then it will create integer values like
above, but it will also create value labels.  As you see below, the
variable writecat4 is labeled 30- 40- 50- and 60-.

egen writecat4 = cut(write), at(30,40,50,60,70) label
tabstat write, by(writecat4) stats(min max)

Summary for variables: write
Group variable: writecat4 

writecat4 |       Min       Max
----------+--------------------
      30- |        31        39
      40- |        40        49
      50- |        50        59
      60- |        60        67
----------+--------------------
    Total |        31        67
-------------------------------

We use the nolabel option on the table command to suppress
the display of the value labels and you can see that the variable really is
coded 0, 1, 2 and 3.

tabulate writecat4, nolabel

  writecat4 |      Freq.     Percent        Cum.
------------+-----------------------------------
          0 |         21       10.50       10.50
          1 |         51       25.50       36.00
          2 |         75       37.50       73.50
          3 |         53       26.50      100.00
------------+-----------------------------------
      Total |        200      100.00

If you prefer, you can ask cut()
to choose the cutoffs to form groups with approximately the same number per
group. Below we request the creation of 4 (roughly) equally sized groups.

egen writecat5 = cut(write), group(4) label
table write writecat5 

--------------------------------------
writing   |         writecat5         
score     |   31-  45.5-    54-    60-
----------+---------------------------
       31 |     4                     
       33 |     4                     
       35 |     2                     
       36 |     2                     
       37 |     3                     
       38 |     1                     
       39 |     5                     
       40 |     3                     
       41 |    10                     
       42 |     2                     
       43 |     1                     
       44 |    12                     
       45 |     1                     
       46 |            9              
       47 |            2              
       49 |           11              
       50 |            2              
       52 |           15              
       53 |            1              
       54 |                  17       
       55 |                   3       
       57 |                  12       
       59 |                  25       
       60 |                          4
       61 |                          4
       62 |                         18
       63 |                          4
       65 |                         16
       67 |                          7
--------------------------------------

For more information, see the help or reference manual about
egen.