Econometrics

1. A scatter-plot is a graph made by plotting ordered pairs in a coordinate plane to show the correlation between two sets of data. It helps to show us the trends between the two variables for example whether there is a positive correlation, a negative correlation or no correlation at all.

This graph shows the relationship between hours and age. We can see from the regression line that there is a negative correlation between the two variables. The correlation table for gives a correlation coefficient of -0.4222. This shows quite a strong negative association. This means that the older you are the fewer hours you will work.

| HOURS |

AGE | -0.422170403728502 |

Here we have a graph showing that an increased education may mean longer hours. The correlation coefficient 0.2541 shows the weak negative correlation

| HOURS |

EDU | 0.2541213617480163 |

Here we have a scatter plot showing the relationship between hours worked and net household income. There is a weak positive correlation but we can see that throughout the range of low household income and high household income they all work between about 30-50 hours. The correlation of 0.2331 emphasises this weak positive correlation.

| | HOURS |

HINC | | 0.2331193777741671 |

The scatter plot between hours worked and number children (under the age of 18) shows that more children you have the more hours you work. However there is a weak positive correlation and this can be seen the correlation coefficient.

| | HOURS |

NKIDS | | 0.2524050200681098 |

The relationship between hours worked and wage has a strong positive correlation seen from the regression line in the graph and also the correlation table where the gradient of the regression line is 0.591. This means that a higher wage means that hours worked are also higher.

| HOURS |

WAGE | 0.590935072157999 |

2.

Dependent Variable: HOURS | | |

Method: Least Squares | | |

Date: 12/14/10 Time: 14:39 | | |...