Question

I have to do a simple linear regression project. The dependent variable that I chose is international tourist receipts (US$ billions) and the independent variable I chose is International tourist arrivals in (billions). Did I set up my variables correctly? I am using data from the World Bank. The main trouble I am having is why testing the correlation between these two variables is important and need some ideas on answering the few questions in the introduction of the essay, which I provided below. Thanks!

Introuduction- what question are you asking? What are you trying to explain, why are you trying to explain this variable, and what are you using to explain it?

Answer 1

Dependent variable - International tourist receipts (US $ billions)

Independent variable - International tourist arrivals (in billions)

Receipts will depend on tourist arrivals. International tourist arrivals, and, receipts are thus independent, and, dependent variables respectively.

Another variable that can be used is International Tourism Expenditures. These are World Bank's economic indicators on Tourism.

The number of arrivals is the number of tourists, outside their usual environment, other than the country in which they have their usual residence, for not more than 12 months. A remunerated activity is not the reason for the visit.

Receipts

Expenditures by inbound visitors, inclusive of payment for international transport, to national carriers.

Tourism Expenditures

Expenditure of international unbound visitor

One can use a balanced panel of countries, for half a decade. The number of years can be selected for data analysis.

Countries are interdependent. The cross-section can be tested.

The test can be done for cross-sectional dependence.

The result can be weak-cross sectional dependence, or, strict cross-sectional independence.