Health expenditures. Can the amount of money that a country spends on health (as % of GDP) be predicted by other economic indicators? Here’s a regression predicting Expenditures on Public Health (as % of GDP) from Expected Years of Schooling and Internet Users (per 100 people):

Dependent variable is: Expenditures on Public Health R squared = 55.17%

s = 1.710 with 96 - 3 = 93 Term Estimate Std Error t-Ratio P-value Intercept 0.19941 0.95009 0.21 0.8342 Expected Years of Schooling

(of children)

(years)

0.23244 0.08259 2.81 0.006 Internet Users Per 100 People

(2004)

0.05142 0.01031 4.99 60.0001

a) Write the regression model.

b) Are the assumptions and conditions met?

c) State and test the standard null hypothesis for the coefficient of Expected Years of Schooling. Use the standard a-level of a = 0.05 and state your conclusion.

d) Does the coefficient of Internet Users/100 people mean that when Internet use increases, the expenditures on public health will increase as well?

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Residuals Residuals 64202T -2 6 4 2 0 -2 + + 2 4 6 8 Predicted Values + -2 -1 0 1 2 Nscores