The Federal Emergency Management Agency (FEMA) provides disaster relief for states impacted by natural disasters (e.g., hurricanes, tornados, floods). Do these bad weather windfalls lead to public corruption? This was the research question of interest in an article published in the Journal of Law and Economics (Nov. 2008). Data on y = average annual number of public corruption convictions (per 100,000 residents) and x = average annual FEMA relief (in dollars) per capita for each of the 50 states were used in the investigation.
a. Access the data, saved in the file, and construct a scatter plot. Do you observe a trend?
b. Fit the simple linear regression model, E(y) = β0 + β1x, to the data and obtain estimates of the y-intercept and slope.
c. Practically interpret the estimated y-intercept and estimated slope.