Why fitting a linear model to given data might be misleading

Reference no: EM131401235

HDI Revisited.

The United Nations Development Programme (UNDP) uses the Human Development Index (HDI) in an attempt to summarize in one number the progress in health, education, and economics of a country. The number of cell phone subscribers per 1000 people is positively associated with economic progress in a country. Can the number of cell phone subscribers be used to predict the HDI? Here is a scatterplot of HDI against cell phone subscribers:

1465_Graph 4.jpg

a) Explain why fitting a linear model to these data might be misleading.

b) If you fit a linear model to the data, what do you think a scatterplot of residuals versus predicted HDI will look like?

Reference no: EM131401235

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