Relationship between income and percentage growth in wealth

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Reference no: EM131381534

In the situation of given problem, test for the existence of a linear relationship between the two variables.

Problem
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.

Reference no: EM131381534

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