Data on household food consumption was collected for a random sample of 26 households in Washington DC. An economist wants to relate household food consumption, y, to household income, x1, and household size, x2, with the first-order model:

E(y) = 0+1x1+2x2

a. Fit the model to the data. Do you detect any signs of multicollinearity in the data? Explain.

b. Is there visual evidence (from a residual plot) that a second-order model may be more appropriate

for predicting household food consumption? Explain.

c. Comment on the assumption of constant error variance, using a residual plot. Does it appear to

be satisfied?

d. Are there any outliers in the data? If so, identify them.

e. Based on a graph of the residuals, does the assumption of normal errors appear to be reasonably

satisfied? Explain.

Data:

House:

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

FoodCon:

4.2

3.4

4.8

2.9

3.5

4

3.6

4.2

5.1

2.7

4

2.7

5.5

4.1

5.5

4.5

5

4.5

2.8

3.9

3.6

4.6

3.8

4.5

4

7.5

Income:

41.1

30.5

52.3

28.9

36.5

29.8

44.3

38.1

92

36

76.9

69.9

43.1

95.2

45.6

78.5

20.5

31.6

39.9

38.6

30.2

48.7

21.2

24.3

26.9

7.3

Size:

4

2

4

1

2

4

3

4

5

1

3

1

7

2

9

3

5

4

1

3

2

5

3

7

5

5