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Measuring Correlations of Variables with Money Spent

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Refer to Column 3 of Table 1 on p. 31 of the following journal paper (see reference below). The dependent variable is the amount of money spent on conservation so the table measures the correlations between this variable and a variety of independent variables from the model.

a. Describe the correlation with the independent variable REPTILE. Does it make sense? Why or why not?

b. Describe the correlation with the independent variable ENDANGERMENT. Why is this relationship troubling from a conservation standpoint?

c. Is there any variable in this list that supports the premise that people tend to support the conservation of charismatic megafauna? Why or why not?

Reference: Metrick, A., & Weitzman, M. L. (1998). Conflicts and choices in biodiversity preservation. The Journal of Economic Perspectives, 12(3), 21-34.

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Solution Summary

The expert helps use data from a journal article to measure correlations of variables with money spent on conservation.

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The regression formula is:

LN(SPEND) = 9.17 + .73*MAMMAL + .39*BIRD - 1.79*REPTILE - .71*AMPHIBIAN + .62*ENDANGERMENT +.86*LN(SIZE) + .06*UNIQUE - .52*SUBSPECIES

a) The REPTILE variable is a dummy variable where if the animal is a reptile then the variable is assigned a value of 1 and a 0 if it isn't a reptile. Thus, this coefficient of -1.79 is indicating that reptiles on average receive considerably fewer funds than any other animal type (mammal, bird, etc.). Further, this coefficient is statistically significant at the 1% level so there is a definite negative ...

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