HDI revisited. The United Nations Development Programme (UNDP) uses the Human Development Index (HDI) in an attempt to summarize in one number the progress in health, education, and economics of a country. The number of cell phone subscribers per 1000 people is positively associated with economic progress in a country. Can the number of cell phone subscribers be used to predict the HDI? Here is a scatterplot of HDI against cell phone subscribers:

a) Explain why fitting a linear model to these data might be misleading.

b) If you fit a linear model to the data, what do you think a scatterplot of residuals vs. predicted HDI will look like?

HDI 0.9 0.8 0.7 0.6 0.5 0.4 0.3+ 0 200 400 600 800 1000 1200 Cell Phone Subscribers