2. Asset forfeiture for drug crimes, where the state seizes (takes away) cash, cars, homes, and other possessions from persons arrested for drug crimes. It is a controversial practice. Seizing the assets of drug offenders is supposed to act as a deterrent, but it could also make things worse by angering them and make them poorer. You want to test what effect asset forfeiture has on recidivism, so you examine a group of 130 drug arrestees who had their assets taken and 70 where the arrestees assets were not taken. 80 of those whose assets were taken were rearrested within five years and 20 of those whose assets were not seized were rearrested in the same period of time. Here is your observed data. (50 pts. total)

Recidivated in Three Years?

Assets Seized?	Not re-arrested	Yes re-arrested	Total
Not seized	50	20	70
Yes seized	50	80	130
Total	100	100	200

a. What is the independent variable and what is the dependent variable?

b. What is the risk, the unconditional probability, of recidivating?

c. What is the relative risk of recidivating given that you had your assets seized?

d. What is the relative risk of recidivating given that you did not have your assets seized?

e. Based on the relative risks, does there appear to be a relationship between asset forfeiture and recidivism? Explain.

f.Test the null hypothesis that asset forfeiture is unrelated to recidivism, against the alternative that there is a relationship (they are not independent). Use an alpha of .01, and perform each step of your hypothesis test. In step 5, make sure to describe what you conclude about the policy.

g. If there is a relationship between asset forfeiture and recidivism, how strong a relationship is there? Calculate and interpret the appropriate statistic.