Description of the dataset

Fortune magazine publishes the list of billionaires annually. The 1992 list included 233 individuals or families. Their wealth, age and geographic location (Asia, Europe, Middle East, United States or Other) is reported.  For this problem, you will only work with the categories of Middle East and Other

Variable Names :

Wealth: Wealth of family or individual in billions of dollars
Age: Age in years (for families it is the maximum age of family members)
Area: Region of the World (Asia, Europe, Middle East, United States and Other).


1.    Plot Wealth vs. Age and use Area as the Marker.

2.    Looking at the graph do you think the regression model will contain an interaction term?  Why or why not?

3.    Produce a histogram of the variable Wealth.

4.    Is Wealth a normally distributed variable?

5.    Compute a new variable, the reciprocal of wealth, e.g. 1/Wealth.  Call the new variable recip_w
6.    Plot recip_w vs. age and use Area as the Marker.  Show the regression lines for each group.

7.    Create the interaction term between age and area.
8.    Fit a regression equation describing how recip_w is related to age, area, and the interaction of age and area.

9.    Give the regression equations for the following
a.    The regression equation from the regression in #8 above.

b.    The equation relating recip_w to age for the Middle East
c.    Test to see if the slopes are significantly different.
d.    Test to see if the intercepts are significantly different.

10.    Do these regression equations do a very good job of predicting the wealth of a person?  Why or why not?

Price: $11.57

Solution: The downloadable solution consists of 7 pages, 457 words and 9 charts.
Deliverable: Word Document