Simple Linear Regression analysis is a statistical technique that attempts to explore andmodel the linear relationship between two variables for decision making.

You are required to describe a situation where a simple linear regression analysis has to be applied. In your write up you haveto:

1. Provide a brief background of the situation you are going to look at. Specifically,justify the choice of the dependent variable and independent variable. Indicatethe general model that you are going to estimate. Discuss the plausiblerelationship between the dependent variable and the independent variable, andwhat that leads you to conclude about the expected signs of the coefficients inthe model. (10 marks)

2. Using a numerical example, apply the simple linear regression analysis

techniques and Present the estimated model. Give an interpretation of each ofthe estimated coefficients. Determine the measures of goodness of fit anddiscuss the validity of the model.(10 marks)