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This project uses data on real Gross Domestic Product (GDP) per capita, educational and health expenditures per capita and the adult mortality rate for Sri Lanka; they cover the period 1951 to 1981. It aims at ascertaining whether there is a relationship between the death rates, GDP, health and education spending per capita, in Sri Lanka over the period in question.
1. Describe the data, using summary statistics and graphs, as appropriate.
2. Calculate the pair-wise correlation coefficients between DEATH and each of the other variables. Test the statistical significance of each correlation coefficient.
3. Estimate a regression model of the form
DEATHt = α + β1GDPPCt + β2EDUCPCt +β3HEXPPCt +ut
where the t subscript corresponds to year t, Interpret the coefficient estimates and comment on their economic and statistical significance.
4. Interpret the regression R2 and test its statistical significance.
5. Predict the adult death rate for Sri Lanka at a GDP per capita level of 800 rupees Hint: assume EDUCOC and HEXPPC are at their mean value.
6. Re-estimate the model taking logs of all variables and comment on any changes to the results and goodness of fit. Note: it is sufficient to discuss the changes, without explicitly showing the testing procedure.
7. Summarise the key results and draw conclusions.
Copy and paste the following data into Excel:
|
Year |
DEATH |
GDPPC |
EDUCPC |
HEXPPC |
|
1951 |
12.9 |
617.59 |
14.6 |
8.8 |
|
1952 |
12 |
629.63 |
16.47 |
10.51 |
|
1953 |
10.1 |
619.4 |
16.96 |
10.78 |
|
1954 |
10.4 |
623.65 |
15.96 |
10.84 |
|
1955 |
11 |
648.85 |
15.51 |
10.67 |
|
1956 |
9.8 |
634.94 |
17.84 |
11.4 |
|
1957 |
10.1 |
622.72 |
19.88 |
11.87 |
|
1958 |
9.7 |
619.15 |
22.09 |
12.9 |
|
1959 |
9.1 |
617.71 |
24.84 |
14.72 |
|
1960 |
8.6 |
641.41 |
24.14 |
14.28 |
|
1961 |
8 |
646.34 |
29.64 |
15.86 |
|
1962 |
8.5 |
649.81 |
30.31 |
14.56 |
|
1963 |
8.5 |
655.75 |
31.44 |
14.77 |
|
1964 |
8.7 |
697.83 |
32.27 |
13.82 |
|
1965 |
8.2 |
694.04 |
33.38 |
13.98 |
|
1966 |
8.3 |
688.95 |
32.49 |
14.45 |
|
1967 |
7.5 |
705.56 |
30.53 |
14.38 |
|
1968 |
7.8 |
744.75 |
30.13 |
14.74 |
|
1969 |
8 |
767.87 |
32.26 |
15.99 |
|
1970 |
7.5 |
786.16 |
35.53 |
16.1 |
|
1971 |
8.2 |
780.63 |
32.42 |
16.16 |
|
1972 |
8.1 |
786.43 |
33.67 |
15.62 |
|
1973 |
8.7 |
802.6 |
31.03 |
13.8 |
|
1974 |
9 |
825.15 |
24.44 |
11.63 |
|
1975 |
8.5 |
883.11 |
25.89 |
12.63 |
|
1976 |
7.8 |
842.48 |
28.66 |
14.28 |
|
1977 |
7.4 |
860.07 |
25.17 |
13.45 |
|
1978 |
6.6 |
924.96 |
25.25 |
15.42 |
|
1979 |
6.5 |
956.14 |
29.78 |
16.54 |
|
1980 |
6.1 |
997.82 |
32.29 |
15.84 |
|
1981 |
6 |
1034.6 |
30.93 |
14.08 |
Variables:
Year = the year of observation.
Death = Adult Death Rate per 1000.
GDPPC = Real GDP per capita in Rupees.
EDUCPC = Real Educational Expenditures per capita in Rupees.
