The Worldwide Cost of Living Survey published by The Economist provides an index that expresses the cost of living in other cities as a percentage of the New York cost. For example, in 2011, the cost of living index in Tokyo was 161, which means that it was 61% higher than New York. The output shows the regression of the 2011 on the 2010 index for the ten most expensive cities in 2011, where Index 2011 is the response variable.
a) State the hypotheses about the slope (both numerically and in words).
b) Perform the hypothesis test and state your conclusion in context.
c) Explain what the R- squared in this regression means.
d) Do these results indicate that, in general, cities with a higher index in 2010 had a higher index in 2011? Explain.

  • CreatedMay 15, 2015
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