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Regression analysis of CIA data.

Refer to the CIA data, which reports demographic and economic information on 46 countries. Let unemployment be the dependent variable and percent of the population over 65, life expectancy, and literacy be the independent variables.

a. Determine the regression equation using a software package. Write out the regression equation.
b. What is the value of the coefficient of determination?
c. Check the independent variables for multicollinearity.
d. Conduct a global test on the set of independent variables.
e. Test each of the independent variables to determine if they differ from zero.
f. Would you delete any of the independent variables? If so, rerun the regression analysis and report the new equation.
g. Make a histogram of the residuals from your final regression equation. Is it reasonable to conclude that the residuals follow a normal distribution?
h. Plot the residuals versus the fitted values and check. Are there any problems?

See attached file for full problem description.


Solution Summary

The solution gives complete steps of analysis of CIA data using regression and correlation analysis. Regression coefficient, R square value, global test, significance of regression coefficients are included with interpretations. Residual plots are used to validate the theoretical assumptions for the regression analysis.