Linear Regression

Running Head : PERSONAL INCOME AND OUTLAYSThe Link Between psychealised Income and OutlaysAbstractIt is discover that as individual(prenominal) income increases , the expenses a soul incurs excessively increases . This reckon utilized simple additive fixing analysis to model if there is a link between the both exchangeables . The dead reckoning is that the outlays of a person is positively linearly reliant on the income make by a person . turnaround results study that outlays be positively linearly parasitical on in the flesh(predicate) income . A 1 unit increase in personalised income leads to a 0 .8269 unit increase in outlays 88 .62 of the variation of the outlays is explained by personal income This implies that the manakin employ in this project is very strongThe Link Between personalised Income and Outl aysIntroductionPersonal income is specialize as a person s business enterprises , investment funds interest and dividends , and other sources over a period of angiotensin converting enzyme year . On the other hand , outlays argon defined as the expenditures of individuals from consumption and production activities . Usually , a person s outlays would come from the money that he earned from work or business . Therefore , these inconstants were selected in this project to mold if outlays were symbiotic on the amount of income earned by a personThe selective information used were the author s personal income and outlays from 1996 to 2007 . Simple order leave alone be implemented . A linear reverting is a statistical procedure that is used to determine whether one covariant is statistically pendent to another variant (Gujarati 2003 . It conniptions a regression model in the form of y a bx , where Y is the pendent variable , x is the autarkical variable , a is the y-int ercept ( esteem of Y when x is 0 , and b is ! the coefficient of variable x . The aim is to estimate the values of a and b in oreder to explain the effects of a change in x to Y .

of In this study , the dependent variable is the outlay while the independent variable is the personal income . The hypothesis is that the outlays of a person is positively linearly dependent on the income earned by a personRegression ResultsThe t-statistic of the independent variable income is 8 .82 . As a rule of thumb , if the t-statistic of a variable is more(prenominal) than 2 , the variable is significant . This delegacy that outlays are importantly dependent on a person s inco meThe R-squared value of the regression model is 0 .8862 or 86 . This means that 88 .62 of the variation of the dependent variable (outlays is explained by personal income . excessively , the value of the R-squared is significantly high . This implies that the goodness of fit of the model used in this study is very strongP-values are as well as used to determine the importation of the variables This is done by comparability the p-value to the selected level of significance . If the p-value is set out than the level of significance the variable is significant . The p-value of the outlay variable...If you extremity to get a skilful essay, order it on our website: OrderCustomPaper.com

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