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Linear Regression and Correlation Analysis

Molly Prickett has just purchased a relatively small manufacturing company. The Company employs approximately 125 hourly workers, all performing essentially the same assembly-line operation. These non-unionized workers are concerned because they believe their wages for the past 21 years did not keep up with inflation. The Prickett data file give the average (hourly) wage for these people for the 21 years. Ms. Prickett has agreed to look at the wage pattern over the 21-year period. Her plans are to use the consumer price index-urban (CPI-U) to determine real wages for the 21 year period. The CPU data for the 21 years are given in the attached Excel file.

The CPU-U is based on prices of food, clothing, shelter, fuels, transportation and health care purchased for day-to-day living. Prices are collected in 85 areas across the U.S. from over 57,000 housing units and more than 19,000 establishments. To calculate the index, each item is assigned a weight corresponding to its relative importance in the consumer's budget.

Questions to answer:

1. Describe the problem at hand
2. Appropriate analytical tools to solve above problem
3. The pertinent results
4. Recommendation to the client (Molly Prickett)

I need this in excel (regression output, scatterplot etc)

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Solution Summary

Excel spreadsheet picks appropriate analytical tools and show the pertinent results, with recommendations for a client purchasing a manufacturing company.

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