Exhibit 14-10. A sociologist examines the relationship between the poverty rate

Question

Exhibit 14-10. A sociologist examines the relationship between the poverty rate and several socioeconomic factors. For the 50 states and the District of Columbia (n= 51), he collects data on the poverty rate(y, in %), the percent of the population with at least a high school education (x), median income ( in $1000s), and the mortality rate per 1,000 following modetey=A+A, +Aa +Bx, + x + + + The following tables The following table shows a portion of the regression results. ANOVA MS Significance F Regressiorn Residual Total 417.3 139.1 94.6 6.33E-20 47 50 69.1 486.4 Standard pper Coefficients Error t Stat -value Lower 95% 95% Intercept Education Income Mortality 60.3 0.43 -0.20 0.08 4.8 12.47 1.65E-16 0.057.78 5.45E-10 0.03-7.75 6.02E-10 0.470.6438 50.6 70.09 -0.54 -0.32 -0.25 -0.15 0.41 0.17 -0.26 Notes: Data obtained from the Statistical Abstract of the US for the year 2007 Refer to Exhibit 14-10. The coefficient of determination indicates that 86% of the variation in the poverty rate is explained by the regression model. 14% of the variation in the regression model is explained by the variation in the poverty rate 86% of the variation in the regression model is explained by the variation in the poverty rate 14% of the variation in the poverty rate is explained by the regression model.

Explanation / Answer

Coefficient of determination

R2 = SSR/ SST

R2 = 417.3/ 486.4

R2 = 0.86

Hence,

86% of the variation in poverty rate can be explained by the model.

Option A is correct.

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