Homework Assignment #5

All homework assignments must typed or legibly handwritten, and must show your name, the assignment number, course number, and the date clearly.  Homework is due at the beginning of class on the specified date.

Due Monday, November 13

Chapter exercises:

ch. 14: 12 & 18

WebStat tasks:

The Emerald health care plan proclaims that its costs have risen less than overall costs of good and services in the U.S.  Evaluate this claim with the data below.  The data include the costs for the Emerald health plan, the Consumer Price Index for urban consumers, and the medical care component of the Consumer Price Index for each year between 1986 and 1992.

Enter these data into WebStat.  Use simple linear regression between year (as the independent variable) and each of the other variables in turn.  The resulting linear regression equations describe the changes in costs during this period.  Which component of the equations can you use to examine the rate of change?  Use all of this information to evaluate the accuracy of the health plan's claim.

The data columns refer to (in order): year, the Emerald health plan's costs, the Consumer Price Index for urban consumers, and the medical care component of the Consumer Price Index.

1986    176      110.5   125.7
1987    180.9   115.4   132.7
1988    198.7   120.5   141.9
1989    208.0   126.1   154.1
1990    204.7   133.8   169.3
1991    215.1   137.9   182.8
1992    229.0   142.0   195.2