The attached who.csv dataset contains real-world data from 2008. The variables included follow. Country: name of the country LifeExp: average life expectancy for the country in years InfantSurvival: proportion of those surviving to one year or more Under5Survival: proportion of those surviving to five years or more TBFree: proportion of the population without TB. PropMD: proportion of the population who are MDs PropRN: proportion of the population who are RNs PersExp: mean personal expenditures on healthcare in US dollars at average exchange rate GovtExp: mean government expenditures per capita on healthcare, US dollars at average exchange rate TotExp: sum of personal and government expenditures.

#get the data who.csv
who <- read.csv("https://raw.githubusercontent.com/maharjansudhan/DATA605/master/who.csv", sep = ",", header = TRUE)
head(who)
##               Country LifeExp InfantSurvival Under5Survival  TBFree
## 1         Afghanistan      42          0.835          0.743 0.99769
## 2             Albania      71          0.985          0.983 0.99974
## 3             Algeria      71          0.967          0.962 0.99944
## 4             Andorra      82          0.997          0.996 0.99983
## 5              Angola      41          0.846          0.740 0.99656
## 6 Antigua and Barbuda      73          0.990          0.989 0.99991
##        PropMD      PropRN PersExp GovtExp TotExp
## 1 0.000228841 0.000572294      20      92    112
## 2 0.001143127 0.004614439     169    3128   3297
## 3 0.001060478 0.002091362     108    5184   5292
## 4 0.003297297 0.003500000    2589  169725 172314
## 5 0.000070400 0.001146162      36    1620   1656
## 6 0.000142857 0.002773810     503   12543  13046
  1. Provide a scatterplot of LifeExp~TotExp, and run simple linear regression. Do not transform the variables. Provide and interpret the F statistics, R^2, standard error,and p-values only. Discuss whether the assumptions of simple linear regression met.

Answer:

scatter_plot <- lm(LifeExp ~ TotExp, data = who)
plot(who$LifeExp ~ who$TotExp)
abline(scatter_plot)

summary(scatter_plot)
## 
## Call:
## lm(formula = LifeExp ~ TotExp, data = who)
## 
## Residuals:
##     Min      1Q  Median      3Q     Max 
## -24.764  -4.778   3.154   7.116  13.292 
## 
## Coefficients:
##              Estimate Std. Error t value Pr(>|t|)    
## (Intercept) 6.475e+01  7.535e-01  85.933  < 2e-16 ***
## TotExp      6.297e-05  7.795e-06   8.079 7.71e-14 ***
## ---
## Signif. codes:  0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1
## 
## Residual standard error: 9.371 on 188 degrees of freedom
## Multiple R-squared:  0.2577, Adjusted R-squared:  0.2537 
## F-statistic: 65.26 on 1 and 188 DF,  p-value: 7.714e-14

F statistics : 65.26

R^2 : 0.2577 which means the model describes 25.77% of the whole data.

p-value : 7.714 * 10^-14 means the TotExp is not relevant.

standard error: 6.297 * 10^-5

The assumption is not met. The data is not linear.

# to check the linearity assumptions by plotting the residuals vs. TotExp
plot(scatter_plot$residuals ~ who$TotExp)
abline(h = 0, lty = 3)

  1. Raise life expectancy to the 4.6 power (i.e., LifeExp^4.6). Raise total expenditures to the 0.06 power (nearly a log transform, TotExp^.06). Plot LifeExp^4.6 as a function of TotExp^.06, and r re-run the simple regression model using the transformed variables. Provide and interpret the F statistics, R^2, standard error, and p-values. Which model is “better?”

Answer:

# raise life expectancy to 4.6
LifeExp_4.6 <- who$LifeExp^4.6
TotExp_0.06 <- who$TotExp^0.06

scatter_plot2 <- lm(LifeExp_4.6 ~ TotExp_0.06)
plot(LifeExp_4.6 ~ TotExp_0.06)
abline(scatter_plot2)

summary(scatter_plot2)
## 
## Call:
## lm(formula = LifeExp_4.6 ~ TotExp_0.06)
## 
## Residuals:
##        Min         1Q     Median         3Q        Max 
## -308616089  -53978977   13697187   59139231  211951764 
## 
## Coefficients:
##               Estimate Std. Error t value Pr(>|t|)    
## (Intercept) -736527910   46817945  -15.73   <2e-16 ***
## TotExp_0.06  620060216   27518940   22.53   <2e-16 ***
## ---
## Signif. codes:  0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1
## 
## Residual standard error: 90490000 on 188 degrees of freedom
## Multiple R-squared:  0.7298, Adjusted R-squared:  0.7283 
## F-statistic: 507.7 on 1 and 188 DF,  p-value: < 2.2e-16

F statistics : 507.7

R^2 : 0.7298 which means the model describes 72.98% of the whole data.

p-value : 2.2 * 10^-16 means the TotExp is not relevant.

standard error: 620060216

Since, the data is linear the model looks much better.

  1. Using the results from 3, forecast life expectancy when TotExp^.06 =1.5. Then forecast life expectancy when TotExp^.06=2.5.

Answer:

Life expectancy when TotExp^0.06 = 1.5 is 193562414.

Life expectancy when TotExp^0.06 = 2.5 is 813622630.

-736527910 + 620060216 * 1.5
## [1] 193562414
-736527910 + 620060216 * 2.5
## [1] 813622630
  1. Build the following multiple regression model and interpret the F Statistics, R^2, standard error, and p-values. How good is the model?

LifeExp = b0+b1 x PropMd + b2 x TotExp +b3 x PropMD x TotExp

Answer:

scatter_plot3 <- lm(LifeExp ~ PropMD + TotExp, data = who)
summary(scatter_plot3)
## 
## Call:
## lm(formula = LifeExp ~ PropMD + TotExp, data = who)
## 
## Residuals:
##     Min      1Q  Median      3Q     Max 
## -23.996  -4.880   3.042   6.958  13.415 
## 
## Coefficients:
##              Estimate Std. Error t value Pr(>|t|)    
## (Intercept) 6.397e+01  7.706e-01  83.012  < 2e-16 ***
## PropMD      6.508e+02  1.946e+02   3.344 0.000998 ***
## TotExp      5.378e-05  8.074e-06   6.661 2.95e-10 ***
## ---
## Signif. codes:  0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1
## 
## Residual standard error: 9.127 on 187 degrees of freedom
## Multiple R-squared:  0.2996, Adjusted R-squared:  0.2921 
## F-statistic: 39.99 on 2 and 187 DF,  p-value: 3.479e-15

F statistics : 39.99

R^2 : 0.2996 which means the model describes 29.96% of the whole data.

p-value : 3.479 * 10^-15 means the TotExp is not relevant.

standard error: 5.378 * 10^-5 for TotExp and 6.508 * 10^2 for PropMD

This model is not that bad as the first model.

  1. Forecast LifeExp when PropMD=.03 and TotExp = 14. Does this forecast seem realistic? Why or why not?

Answer:

Life expectancy is forecasted to be 83.49475 when PropMD = 0.03 and TotExp = 14. It seems relalistic, because averagely people live that long.

#lets see the calculation
life <- 63.97 + (650.8*0.03) + (5.378 * 10^(-5) * 14)
life
## [1] 83.49475