Homework 2 solution

# Homework 2 solution - variables f scatter nettfa inc The...

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Homework: 2 Solution a) count if fsize==1 There are 2017 households of size 1. b) reg nettfa inc age if fsize==1 The income coefficient is positive, signifying a positive relationship between net wealth and income as expected. Furthermore according to the p values equal to 0, we can conclude that this is also a statistically significant c)the intercept has a value of -43.03981, meaning that when a person has zero annual income he borrows money d) yes e) reg nettfa inc if fsize==1 The income coefficient has changed from .799 to .821, which is not significant change. The p- value is still 0.00 showing that there is a statistically significant relationship between the
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Unformatted text preview: variables. f) scatter nettfa inc The scatter diagram potrays a positive relationship albeit with a low correlation between income and net financial wealth. Yes, people who are net borrowers. g) *negative: no retirement acccount could explain why her financial wealth is so low (appears to be borrowing) h) corr nettfa inc A correlation coefficient of 0.37 is obtained. This signifies that income and wealth are not highly correlated i) count if fsize>=. There are no missing values. j) reg nettfa inc age agesq if fsize==1 * yes, the signs are opposite and the coefficient on age squared is significant...
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• Spring '10
• Cowell
• Correlation and dependence, Pearson product-moment correlation coefficient, Spearman's rank correlation coefficient, nettfa inc

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