I'm not sure where to start. Please see attached file for full problem description.
John Wood works as a ranger for the Texas state police force. Lately, he has noticed an alarming trend toward higher recidivism rates by criminals in several southwestern counties in Texas. Law enforcement agencies are concerned about the escalating crime rates, and there is a growing public outcry to stem the rising tide of social disorder. Ranger Wood has been charged with the responsibility of identifying a method of predicting crime rates in anticipation of corrective action to be taken by the Texas police force. He feels that he must therefore isolate a predictive variable that might explain crime abatement, feeling that there might be a relationship between crime rates and the amount of money spent to control lawlessness. Ranger Wood therefore randomly selects 10 counties in southwest Texas and obtains monthly data for the most recent months available on the number of serious crimes in each county and the amount of money spent by the county to combat crime. The results are in the attached file.
Does it appear that Ranger Wood has uncovered a method of predicting crime rates? If Pecos County budgets $16,000 next month for law enforcement protection, what is your estimate of the number of criminal acts that might be perpetrated? The Texas legislature would like an interval estimate of county crime rates if they spend $13,000 on crime prevention in a given county. The legislators insist on 99 percent accuracy in that estimation.
This solution provides answers in Excel for a method of predicting crime rates.