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HW_07_08 - economist to study the relationship between a...

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Page 1 of 1 ECO220Y: Homework, Lectures 7 & 8 Readings: Sections 4.4, 4.7, 4.8 Exercises: 4.55, 4.56, 4.58: include complete interpretation in paragraph-form for answer to Part e. of 4.58 Applets (CD-ROM): Applet 1 (page 128), Applet 2 (page 128) Problems: (1) Suppose that s XY = 10 and s WZ = -20. Based on this is it reasonable to conclude that X and Y are more strongly related than W and Z? Explain. (2) Suppose that the coefficient of correlation between x and y is 0.5 and the s.d. of x is $10 and the s.d. of y is $10. A move from x = $10 to x = $12 tends to be associated with how much of a change in y? (3) Suppose you calculate x = 12, y = 24, s X = 2, s Y = 4, and s XY = -12. How do you know you must have made a mistake in calculating these statistics? (4) Can X and Y be related but have a zero covariance? If so, give an example. If not, explain why not. (5) Recent media attention on low birth rates in Canada and Europe causing population declines inspires an
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Unformatted text preview: economist to study the relationship between a woman’s education (EDU_YRS) and the number of children that she has (NUM_KID). A random sample of 2,589 Canadian women is drawn. Using the sample of 2,589 Canadian women the following OLS line and coefficient of correlation are estimated: NUM_KID-hat = 5.1 – 0.2*EDU_YRS r = -0.3132 (a) What kind of data are these? (b) How should you interpret these results? What is the meaning of 5.1? What is the meaning of -0.2? What is the meaning of -0.3132? (c) Is the scatter diagram a good description of these data? Explain. Aside from using statistics such as the coefficient of correlation and least squares line, what is another way to summarize the relationship between these two variables? 5 10 NUM_KID, NUM_KID_hat 5 10 15 20 25 30 EDU_YRS n = 2,589 NUM_KID_HAT = 5.1 - 0.2*EDU_YRS...
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