Poverty Estimation, Inequality, Correlation & Regression & Trend Growth Rate: SPSS/STATA

1. Poverty Estimation, Inequality, Correlation & Regression & Trend Growth Rate: SPSS/STATA SrinivasuluRajendran Centre for the Study of Regional Development (CSRD) Jawaharlal Nehru University (JNU) New Delhi India r.srinivasulu@gmail.com

2. Objective of the session To understand How HHsize influences the monthly per capita total expenditure of the households based OLS

3. 1. What is the procedure to perform Regression? 2. How do we interpret results? 4. What are procedure available for estimating poverty line and Poverty rate and how to do with Econometric software

4. Identify the relationship between variables that we want to perform Scatter plot for outliers and type of relationship • Monthly HH food Expenditure and HHSIZE

5. Linear Regression Analysis using SPSS

6. Objectives • Regression analysis is the next step up after correlation; it is used when we want to predict the value of a variable based on the value of another variable. In this case, the variable we are using to predict the other variable's value is called the independent variable or sometimes the predictor variable. The variable we are wishing to predict is called the dependent variable or sometimes the outcome variable.

7. Assumption • Variables are approximately normally distributed (see Testing for Normality guide). • There is a linear relationship between the two variables. • There are classical assumption ……..

8. Step 1

9. Click Analyze > Regression > Linear... on the top menu. Procedure

10. You will be presented with the following dialog box:

11. Step 2

12. Dependent Variable • Transfer the independent (predictor) variable, hhsize, into the "Independent(s):" box and the dependent (outcome) variable, mfx, into the "Dependent:" box. You can do this by either drag-and-dropping or by using the buttons. • Click the button. Independent Vari

13. Step 2

14. Extra options • Click “Statistics” and it provides Regression coefficients, depends on your analysis you may select your relevant test • Finally click “Continue”

15. Plot - Options • Click “Plot” and it provides option to plot histogram, normal probability, etc, depends on your analysis you may select your relevant plot • Finally click “Continue”

16. Click “OK” to get results in the output viewer

17. Output of Linear Regression Analysis

18. SPSS will generate quite a few tables in its results section for a linear regression. • In this session, we are going to look at the important tables Model Summary table. • This table provides the R and R2 value. The R value is 0.608, which represents the simple correlation and, therefore, indicates a high degree of correlation. The R2 value indicates how much of the dependent variable, monthly HH food exp, can be explained by the independent variable, hhsize. In this case, 37.0% can be explained.

19. The next table is the ANOVA table. • This table indicates that the regression model predicts the outcome variable significantly well. How do we know this? Look at the "Regression" row and go to the Sig. column. • This indicates the statistical significance of the regression model that was applied. Here, P < 0.0005 which is less than 0.05 and indicates that, overall, the model applied is significantly good enough in predicting the outcome variable.

20. The table below, Coefficients, provides us with information on each predictor variable. • This provides us with the information necessary to predict monthly food exp from hhsize. We can see that both the constant and hhsize contribute significantly to the model (by looking at the Sig. column). By looking at the B column under the Unstandardized Coefficients column we can present the regression equation as • mfx = 669.3+ 861.7(hhsize)

21. Interpretation • If HHSIZE goes up by a member or individual, the average monthly HH food expenditure (mfx) goes up by about 862 taka. The intercept value of about 669 taka tells us that if hhsize were zero, mfx would be about 669 taka. The r 2 value of 0.37 means approximately 37 percent • of the variation in the mfx is explained by variation • in the hhsize.