The questions asksto analyse some of the determinants of international variations in life expectancy (lifexp). In order to answer the questions, you will have to analyse the datasetattached via...

The question asks to analyze some of the determinants of international variations in life expectancy
(lifexp). In order to answer the questions, you will have to analyze the dataset attached via using GRETL
or other statistic software. The data are a small selection of international indicators collated by the
World Bank. A detailed description of each variable is available in the data file by clicking on Data > Read
info (or Data > Dataset info, depending on the gretl version you have). Graph, as a scatter plot, the
elationship between life expectancy (lifexp) and Gross Domestic Product (GDP) per person (gdp_pc), an
indicator of income per person. Can you tell anything about the relationship between life expectancy
and income per person from this graph? (3 marks) Create a new variable: the log of GDP per person
(l_gdp_pc). Graph the relationship between life expectancy and the log of GDP per person, and compare
this graph with the graph you generated in your answer to Question 1. For which of the two scatter
plots is a linear model more appropriate? Explain your answer. (3 marks) Now calculate the co
elations
etween life expectancy and the two measures of GDP per person (in levels and logs). What do they tell
you? Are they more informative than scatter plots between the variables? (3 marks) Estimate a simple
(univariate) regression model in which life expectancy (lifexp) is a function of log of GDP per person
(l_gdp_pc). Then: Write down the model that you have estimated using your results for the coefficients.
(2 marks) Interpret and comment on the statistical significance of the slope coefficient of log GDP per
person. (4 marks) Comment on the statistical quality of the overall model. (3 marks) Estimate a multiple
(multivariate) regression model in which life expectancy (lifexp) is a function of log of GDP per person
(l_gdp_pc) , prevalence of HIV (hiv) , progress to secondary education (educ_sec) , and health
expenditure as a percentage of GDP (health_gdp) . Then: Write down the model that you have
estimated and its estimated coefficients. (2 marks) What do the magnitude and significance of the
estimated coefficients tell you? (4 marks) Comment on the statistical quality of the model. (2 marks)
Comment on the differences between the univariate and multivariate models. (4 marks) Task asks to
estimate the relationship between life expectancy and income per person. Questions 1, 2 and 3 ask to
explore the data using charts and descriptive statistics. Make sure you read the questions carefully to
decide which variable to put in the Y-axis (the dependent variable) and in the X-axis (the independent
variable). Questions 4 and 5 ask you to estimate two regression equations that model the relation
etween life expectancy and income per person, and to interpret, and in question5, to compare the
esults.
Solution
1. The following figure shows the scatter plot of Life Expectancy (lifexp) and Gross Domestic
Product Per Person (gdp_pc):

From the above scatter plot we can see that there is no significant linear relationship between
Life expectancy and GDP per person but Life expectancy increases with...