Fall 2010 Stat 514 Test 3 Take Home Problems

Bring these results to the exam on December 13. Keep answers on separate sheets, as you will hand in the solution to one or more problems.

1. Data was collected on the per capita income (PCINC), and percentage of the labor force employed in agriculture (AGR), industry (IND), and in service occupations (SER) for 20 European countries in 1960. We wish to develop a model to predict per capita income using the the percentage of the labor force employed in agriculture and service occupations. Perform four multiple regression analyses of these data, using least-squares, bootstrapped least-squares (tests only), and robust regression (methods M and MM). Examining the results of these analyses and using plots of the data, which analyses give similar results? Which method(s) give the best model, and why did you choose that (those) method(s)?

3. In performing a multiple regression analysis (such as the one above involving economic data from the European countries), suppose that you are considering using either a bootstrap method or a robust regression-based method for analyzing the data. In what situations would a bootstrap approach be preferred? In what situations would a robust regression-based approach be preferred?