In order to assess the effect in one state of
In order to assess the effect in one state of a casualty insurance company’s economic power on its political power, the following model was hypothesized and fitted to data from all 50 states:
Y = β0 + β1X1 + β2X2 + β3X3 + β4x4 + β5X5 + ε
Y = ratio of company’s payments for state and local taxes, in thousands of dollars, to total state and local tax revenues in millions of dollars
X1 = insurance company state concentration ratio (a measure of the concentration of banking resources)
X2 = per capita income in the state in thousands of dollars
X3 = ratio of nonfarm income to the sum of farm and nonfarm income
X4 = ratio of insurance company’s net after-tax income to insurance reserves (multiplied by 1,000)
X5 = average of insurance reserves (divided by 10,000)
Part of the computer output from the estimated regression is shown here. Write a report summarizing the findings of this study.
R@Square = 0.515
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