The Conference Board produces a Consumer Confidence Index (CCI) that reflects

people’s feelings about general business conditions, employment opportunities, and their own income prospects. Some researchers may feel that consumer confidence is a function of the median household income. Shown here are the CCIs for nine years and the median household incomes for the same nine years published by the U.S. Census Bureau. Determine the equation of the regression line to predict the CCI from the median household income. Compute the standard error of the estimate for this model. Compute the value of r 2. Does median household income appear to be a good predictor of the CCI? Why or why not?

CCI Median Household Income ($1,000)

116.8 .............37.415

91.5 .............36.770

68.5 .............35.501

61.6 .............35.047

65.9 .............34.700

90.6 .............34.942

100.0 .............35.887

104.6 .............36.306

125.4 .............37.005