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Why fitting a linear model to given data might be misleading

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Question: 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:

1786_5.png

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: EM131646293

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