The file GRP.TXT contains the data on the following variables for a particular region in

Question: Question 1

The file GRP.TXT contains the data on the following variables for a particular region in New Zealand:

Name	Description
NoCons	Number of building consents issued for new dwellings
ValCons	Value of building consents issued for new dwellings (million $)
Unemp	Number of registered unemployed
House	Number of dwellings sold
Car	Number of New Car Registrations (contains missing data)
Exp	Value of exports (million $)
Imp	Value of imports (million $)
GRP	National Bank Index of Gross Regional Product (GRP)

(a) Obtain the correlation matrix for the variables and the matrix plot of the variables. Discuss

the uses of these two outputs in the context. [4 marks]

(b) Regress GRP on all the explanatory variables and obtain the full regression output. Discuss the statistical significance of the regression coefficients considering the P values. What conclusion would you draw from the Analysis of Variance part of the regression output? Explain your answers in the context. Perform suitable residual diagnostics and discuss the implications. [6 marks]

perform a complete backward predictor elimination procedure. Compare the outputs.

Which step (model) you will recommend for predicting the GRP? Explain your answer.

[5 marks]

(d) Explore the appropriateness of polynomial regression in the context. [5 marks]

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