Casper Jensen, director of energy affairs at the Ministry of Economic Affairs, wants to know whether mindset or taxes is the better instrument to stimulate the adoption of renewable energy resources to tackle climate change. He asks you to prepare an analysis investigating the relationship between the change in the renewable energy share and the percentage of environmentally minded households on the one hand and the energy tax rate for households in 2004 on the other hand. Data for this study are in the data file Renewable Energy.

a. Prepare a correlation matrix, compute descriptive statistics, and obtain a regression analysis of the change in the renewable energy share on the percent of environmentally minded households and the energy tax rate for households in 2004.

Compute 95% confidence intervals for the slope coefficients in each regression equation.

b. What is the conditional effect of a 10% point decrease in the share of environmentally minded households on the change in the renewable energy share?

c. Would the prediction equation be improved by adding the change in the energy tax rate for households as an additional predictor variable?