Refer to the Journal of Law and Economics (Nov. 2008) study of the link between Federal Emergency Management Agency (FEMA) disaster relief and public corruption, Exercise 11.20. Evaluate the overall adequacy of the straight-line model relating a state's average annual number of public corruption convictions (y) to the state's average annual FEMA relief (x). Use α = .01.
Exercise 11.20
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.