A government researcher examines the factors that influence a city’s crime rate. For 41 cities, she collects the crime rate (crimes per 100,000 residents), the poverty rate (in %), the median income (in $1,000s), the percent of residents younger than 18, and the percent of residents older than 65. A portion of the data is shown; the entire data set, labeled Crime, can be found on the text website.

a. Estimate Crime = β0 + β1Poverty + β2Income + β3Under 18 + β4Over 65 + . Discuss the individual and joint significance of the explanatory variables at the 5% significance level.
b. Which explanatory variables are likely to be collinear? Find their sample correlation coefficients toconfirm.

  • CreatedJanuary 28, 2015
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