Dependent variable: Establishments with 1-4 Employees

Independent variable: Median Family Income (thousands $)

1. Based on your selected OLS model, can you conclude that Wal-Mart has buried Mom and Pop? Provide statistical evidence.
2. Using the independent variable from your selected model and discuss whether it is a significant factor. Perform a hypothesis test to see if the corresponding ? is different from 0.
3. Construct a 95% confidence interval for the independent variable (Show the t-multiplier and the margin of error).
4. What are the important factors in the chosen model? Give the level of significance.

Table 2 Does Wal-Mart Reduce Small Business? Wal-Mart stores per capita as explanatory variable, 2000 INDEPENDENT DEPENDENT VARIABLE VARIABLE Self Employment Rate Establishments with 1-4 Employees Establishments with 5-9 Employees (per 100,000 population) (per 100,000 population) OLS SAR SAC OLS SAR SAC OLS SAR SAC Constant -66.933** -51.274* -49.688* 90.075 -182.669 236.980 180.046 76.651 104.764 (2.233) (1.751) (1.756) (0.191) 0.440) 0.547) (0.901) 0.373) 0.528 Wal-Mart stores -0.109 -0.001 -0.152 2.203 0.954 -1.955 3.933 1.712 3.539 (per 100,00 0 (0.229) (0.002) (0.385) (0.297) (0.167) (0.291) (1.247) (0.583) (1.113) population) Percent -0.036 -0.032* -0.031* -1.273*** -0.899*# -0.983* * * -0.849* * * -0.683* * * -0.658** * metropolitan (1.750) (1.959) (1.898) (3.974) (3.676) (4.507) (6.243) (5.575) (5.358) population Medianage 0.222 0.221* 0.225* 6.925 * * * 6.926* * * 6.730** * 1.768* 1.952** 1.819** years) (1.650 (1.868) (1.942) 3.284) (3.962) (4.143) (1.974) (2.231) (2.127) Percent 0.207 0.139 0.142 0.541 -0.510 -0.500 -2.564*# -3.047** -3.008** in poverty (1.094) 0.825) 0.887 182) (0.207) 0.208) (2.031) (2.459) (2.470 Median -0.115 -0.122 -0.111 -0.862 -1.502 -1.113 -1.419* -1.883*** -1.931** * family income (1.054) (1.333) (1.287) (0.504) (1.112) (0.823) (1.954) (2.782) (2.914) (thousands $) Percent -0.037 -0.027 -0.021 0.193 0.419 0.060 0.171 0.255 0.216 nonwhite (1.189) 0.964 0.744) 0.397 1.018) 0.141) 0.829 1.227) (1.015) Land area 0.013 0.012* 0.010 -0.036 -0.086 -0.003 -0.045 -0.091* -0.084* (1,000 sq.miles (1.644) (1.784) (1.598) (0.303) 0.893) 0.032) (0.973) (1.815) (1.659) Percent with 0.408* * * 0.378* * * 0.345** * 4.401 * * * 3.126** * 2.347 1.832** 1.591*** 1.811* * * college (4.018) (4.372) 3.600) (2.762) (2.579) (1.496) (2.708) (2.626) (2.635) education Percent male 1.448* * 1.095** 1.029* -2.619 2.181 5.137 -0.378 1.707 1.095 (2.692) 2.050 1.898 (0.310) 0.302) 0.621) (0.106) 0.478) 0.313) Rho 0.188 0.301 0.442** * 0.076 0.182 0.181 (1.260) (1.364) (3.435) (0.318) (1.450) (1.106) Lambda -0.220 0.660*** 0.043 (0.660) (3.829) (0.163 M-test 0.530 30.1217 1.144 Observations 48 48 48 48 48 48 48 48 48 R-squared 0.652 0.730 0.744 0.615 0.678 0.773 0.814 0.820 0.827 Log-likelihood -109.448 -61.444 -33.607 -239.156 -191.891 -162.983 -215.524 -157.502 -129.555 SOURCES: Wal Mart; US Census Buraw NOTES:-statistics in parentheses; asterisks indicate significance asfollows *#*-In #*-5%%, *-10%; |- no spatial dependence in the arors.Figure 4a Density of Wal-Mart and Small Businesses Establishments with 1-4 employees, 2000 350 300 250 200 NUMBER OF RETAIL ESTABLISHMNETS WITH 1-4 EMPLOYEES PER 100,000 RESIDENTS 150 100 50 0.5 1.0 1.5 2.0 2.5 3.0 3.5 WAL-MART STORES PER 100,000 RESIDENTS SOURCES: Wal-Mart, LIS Cenas Buraw NOTE: Data represent the 48 continental states Slope of the regression line shown is 8.805 and the + dated ic is 1.052 (which is not statisticaly significant)