The conference Board produces a Consumer Confidence Index (CCI) that reflects people's feelings about general business...

The conference Board produces a Consumer Confidence Index (CCI) that reflects people's feelings about general business conditions, employment opportunities, and their own income prospects. Some researchers may feel that consumer confidence is a function of the median household income.

Use the attached MS Excel spreadsheet containing the CCIs for nine years and the median household incomes for the same nine years published by the U.S. Census Bureau.

Perform a correlation and regression analysis to predict CCI using median household income. Discuss the following:

Scatter Diagram
R, R2 and 1-R2
The regression equation
Standard error of estimate
The test of hypothesis with the 5-step process. Use a .05 level of significance. Does median household income appear to be good predictor of the CCI? Why or why not?

CCI	Median House Hold Income ($1,000)
116.8	37415
91.5	36770
68.5	35501
61.6	35047
65.9	34700
90.6	34942
100	35887
104.6	36306
125.4	37005

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Expert Solution

milcah answered 7 months ago

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