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Source: Chandan Mukherjee, Howard White, and Marc Wuyts, Econometrics and Data Analysis for Developing Countries, Routledge, New York, 1998, p. 457.

Source: Chandan Mukherjee, Howard White, and Marc Wuyts, Econometrics and Data Analysis for Developing Countries, Routledge, New York, 1998, p. 457.

CHAPTER TWO: TWO-VARIABLE REGRESSION ANALYSIS: SOME BASIC IDEAS 57

a. Plot the data, using the vertical axis for expenditure on food and the horizontal axis for total expenditure, and sketch a regression line through the scatterpoints.

b. What broad conclusions can you draw from this example?

c. A priori, would you expect expenditure on food to increase linearly as total expenditure increases regardless of the level of total expenditure? Why or why not? You can use total expenditure as a proxy for total income.

2.16. Table 2.9 gives data on mean Scholastic Aptitude Test (SAT) scores for college-bound seniors for 1967-1990.

a. Use the horizontal axis for years and the vertical axis for SAT scores to plot the verbal and math scores for males and females separately.

b. What general conclusions can you draw?

c. Knowing the verbal scores of males and females, how would you go about predicting their math scores?

d. Plot the female verbal SAT score against the male verbal SAT score. Sketch a regression line through the scatterpoints. What do you observe?

TABLE 2.9 MEAN SCHOLASTIC APTITUDE TEST SCORES FOR COLLEGE-BOUND SENIORS, 1967-1990*

Year

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