setwd("~/Documents/RStudio (DATA-101)")
countries <- read.csv("AllCountries.csv")
head(countries)
##          Country Code LandArea Population Density   GDP Rural  CO2 PumpPrice
## 1    Afghanistan  AFG   652.86     37.172    56.9   521  74.5 0.29      0.70
## 2        Albania  ALB    27.40      2.866   104.6  5254  39.7 1.98      1.36
## 3        Algeria  DZA  2381.74     42.228    17.7  4279  27.4 3.74      0.28
## 4 American Samoa  ASM     0.20      0.055   277.3    NA  12.8   NA        NA
## 5        Andorra  AND     0.47      0.077   163.8 42030  11.9 5.83        NA
## 6         Angola  AGO  1246.70     30.810    24.7  3432  34.5 1.29      0.97
##   Military Health ArmedForces Internet  Cell HIV Hunger Diabetes BirthRate
## 1     3.72   2.01         323     11.4  67.4  NA   30.3      9.6      32.5
## 2     4.08   9.51           9     71.8 123.7 0.1    5.5     10.1      11.7
## 3    13.81  10.73         317     47.7 111.0 0.1    4.7      6.7      22.3
## 4       NA     NA          NA       NA    NA  NA     NA       NA        NA
## 5       NA  14.02          NA     98.9 104.4  NA     NA      8.0        NA
## 6     9.40   5.43         117     14.3  44.7 1.9   23.9      3.9      41.3
##   DeathRate ElderlyPop LifeExpectancy FemaleLabor Unemployment Energy
## 1       6.6        2.6           64.0        50.3          1.5     NA
## 2       7.5       13.6           78.5        55.9         13.9    808
## 3       4.8        6.4           76.3        16.4         12.1   1328
## 4        NA         NA             NA          NA           NA     NA
## 5        NA         NA             NA          NA           NA     NA
## 6       8.4        2.5           61.8        76.4          7.3    545
##   Electricity Developed
## 1          NA        NA
## 2        2309         1
## 3        1363         1
## 4          NA        NA
## 5          NA        NA
## 6         312         1

Simple Linear Regression (Fitting and Interpretation)

Using the AllCountries dataset, fit a simple linear regression model to predict LifeExpectancy (average life expectancy in years) based on GDP (gross domestic product per capita in $US). Report the intercept and slope coefficients and interpret their meaning in the context of the dataset. What does the R² value tell you about how well GDP explains variation in life expectancy across countries?

simple_linear_regression <- lm(LifeExpectancy ~ GDP, data = countries)
summary(simple_linear_regression)
## 
## Call:
## lm(formula = LifeExpectancy ~ GDP, data = countries)
## 
## Residuals:
##     Min      1Q  Median      3Q     Max 
## -16.352  -3.882   1.550   4.458   9.330 
## 
## Coefficients:
##              Estimate Std. Error t value Pr(>|t|)    
## (Intercept) 6.842e+01  5.415e-01  126.36   <2e-16 ***
## GDP         2.476e-04  2.141e-05   11.56   <2e-16 ***
## ---
## Signif. codes:  0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1
## 
## Residual standard error: 5.901 on 177 degrees of freedom
##   (38 observations deleted due to missingness)
## Multiple R-squared:  0.4304, Adjusted R-squared:  0.4272 
## F-statistic: 133.7 on 1 and 177 DF,  p-value: < 2.2e-16

Multiple Linear Regression (Fitting and Interpretation)

Fit a multiple linear regression model to predict LifeExpectancy using GDP, Health (percentage of government expenditures on healthcare), and Internet (percentage of population with internet access) as predictors. Interpret the coefficient for Health, explaining what it means in terms of life expectancy while controlling for GDP and Internet. How does the adjusted R² compare to the simple regression model from Question 1, and what does this suggest about the additional predictors?

multi_linear_regression <- lm(LifeExpectancy ~ GDP + Health + Internet, data = countries)
summary(multi_linear_regression)
## 
## Call:
## lm(formula = LifeExpectancy ~ GDP + Health + Internet, data = countries)
## 
## Residuals:
##      Min       1Q   Median       3Q      Max 
## -14.5662  -1.8227   0.4108   2.5422   9.4161 
## 
## Coefficients:
##              Estimate Std. Error t value Pr(>|t|)    
## (Intercept) 5.908e+01  8.149e-01  72.499  < 2e-16 ***
## GDP         2.367e-05  2.287e-05   1.035 0.302025    
## Health      2.479e-01  6.619e-02   3.745 0.000247 ***
## Internet    1.903e-01  1.656e-02  11.490  < 2e-16 ***
## ---
## Signif. codes:  0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1
## 
## Residual standard error: 4.104 on 169 degrees of freedom
##   (44 observations deleted due to missingness)
## Multiple R-squared:  0.7213, Adjusted R-squared:  0.7164 
## F-statistic: 145.8 on 3 and 169 DF,  p-value: < 2.2e-16

Checking Assumptions (Homoscedasticity and Normality)

For the simple linear regression model from Question 1 (LifeExpectancy ~ GDP), describe how you would check the assumptions of homoscedasticity and normality of residuals. For each assumption, explain what an ideal outcome would look like and what a violation might indicate about the model’s reliability for predicting life expectancy. Afterwords, code your answer and reflect if it matched the ideal outcome.

The ideal outcome is that X and Y lines are not shifting away from bring a straight line, observations should not be repeating but rather independent, and spread of residuals should be scattered evenly. Not following these checks can make the model (even if they run) look unreliable.

par(mfrow=c(2,2)); plot(simple_linear_regression); par(mfrow=c(3,3))
abline(simple_linear_regression, col=1, lwd=2)

Dignosing Model Fit (RMSE and Residuals)

For the multiple regression model from Question 2 (LifeExpectancy ~ GDP + Health + Internet), calculate the RMSE and explain what it represents in the context of predicting life expectancy. How would large residuals for certain countries (e.g., those with unusually high or low life expectancy) affect your confidence in the model’s predictions, and what might you investigate further?

# Calculate residuals
residuals_multi <- resid(multi_linear_regression)

# Calculate RMSE for multiple model
rmse_multi <- sqrt(mean(residuals_multi^2))
rmse_multi
## [1] 4.056417

4.056417 is the RMSE that represents how far off the model’s predictions are. Since RMSE represents the average prediction error, a larger RMSE would not help with the model’s confidence of reliability. We would have to investigate on any outlines, making sure the spread of residuals are even or else it would make the model unreliable.

Hypothetical Example (Multicollinearity in Multiple Regression)

Suppose you are analyzing the AllCountries dataset and fit a multiple linear regression model to predict CO2 emissions (metric tons per capita) using Energy (kilotons of oil equivalent) and Electricity (kWh per capita) as predictors. You notice that Energy and Electricity are highly correlated. Explain how this multicollinearity might affect the interpretation of the regression coefficients and the reliability of the model.

This correlation can heavily impact our ability to interpret the correlation, leading to unreliability surrounding Energy and Electricity predictions. Since we wouldn’t be able to tell which variable creates significance on CO2 emissions, which is a big problem, our model would be deemed unreliable.