The index of deflated turnover for retail trade shows the activity in volume of the retail trade sector. The United Nations Statistics Division reports Retail trade deflated sales/turnover (seasonally adjusted) with 2005 = 100. The data-file holds this index for 43 countries for the years 2007– 2010.
a) Find a regression model predicting the 2010 index from the index in 2007 for the sample of 43 countries provided by UNSD.
b) Examine the residuals to determine if a linear regression is appropriate.
c) Test an appropriate hypothesis to determine if the association is significant.
d) What percentage of the variability in the 2010 Index is accounted for by the regression model?