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1. Another example. Here is another example of the group effect cautioned about in the previous exercise. Explain how as a nation's population grows older mean income can go down for workers in each age group, yet still go up for all workers.

2. Basal metabolic rate. Careful statistical studies often include examination of potential lurking variables. This was true of the study of the effect of nonexercise activity (NEA) on fat gain, our lead example in Section 2.3. Overeating may lead our bodies to spontaneously increase NEA (?dgeting and the like). Our bodies might also spontaneously increase their basal metabolic rate (BMR), which measures energy use while resting. If both energy uses increased, regressing fat gain on NEA alone

(a) Make a scatterplot of these data. The relationship appears to be approximately linear, but the wide variation in the response values makes it hard to see detail in this graph.

(b) Compute the least-squares regression line of y on x, and plot this line on your graph.

(c) Now compute the residuals and make a plot of the residuals against x. It is much easier to see deviations from linearity in the residual plot. Describe carefully the pattern displayed by the residuals.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91723805

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