Human Development Index (HDI) 2019. The United Nations Development Programme (UNDP) collects data from developing countries to help solve global as well as national development challenges and reduce inequalities through the sustainable development of nations. In the annual UNDP Human Development Report, you can find data on over 100 variables for each of the select 189 countries observed by UNDP worldwide. One summary measure used by the agency is the Human Development Index (HDI), which attempts to summarize in a single number the progress in health, education, and economics of a country. In 2019, the HDI was as high as 0.954 for Norway and as low as 0.377 for Niger. The gross national income in purchasing power parity per capita (GNIPPP), by contrast, is often used to summarize the overall economic strength of a country. Here is a scatterplot of HDI against GNIPPP. Is the HDI related to the GNIPPP?

a) Explain why fitting a linear model to these data would be misleading.

b) If you fit a linear model to the data, what do you think a scatterplot of residuals versus predicted HDI will look like?

c) There are two outliers: Qatar with a very high GNIPPP and Burundi with a very low HDI for its GNIPPP. Will setting these points aside improve the model substantially?
Explain.

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1 0.9 HDI CU 0.8- 0.7 0.6- 0.5 0.4 HDI and GNIPPP Plot 0.3 0 20,000 40,000 60,000 80,000 100,000 120,000 GNI