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. Someresearchers may feel that consumer confidence is a function of themedian household income.
Use the attached MS Excel spreadsheet containing the CCIs fornine years and the median household incomes for the same nine yearspublished by the U.S. Census Bureau.
Perform a correlation and regression analysis to predict CCIusing 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 levelof significance. Does median household income appear to be goodpredictor 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 |
