Reference no: EM131699076

Question: Conduct the F test for the existence of a linear relationship between the two variables in problem.

Problem: An article in the Journal of Monetary Economics assesses the relationship between percentage growth in wealth over a decade and a half of savings for baby boomers of age 40 to 55 with these people's income quartiles. The article presents a table showing five income quartiles, and for each quartile there is a reported percentage growth in wealth. The data are as follows.

Income quartile:              1            2             3            4            5

Wealth growth (%):        17.3       23.6        40.2        45.8        56.8

Run a simple linear regression of these five pairs of numbers and estimate a linear relationship between income and percentage growth in wealth.