Angela Chou has been asked to investigate the determinants of poverty in Ontario communities. She collected data on 60 communities from Statistics Canada. She selected the percentage of poor persons living under the poverty line [Poor (%)], measured by Low Income Cut-Off, designed by Statistics Canada as a measure of poverty for a community, as the dependent variable. The independent variables selected are percent of single families in each community, the unemployment rate in each community, percent of population in the community holding a bachelor's degree as their highest level of education attained, and percent of population holding a High School Diploma as their highest level of education attained. Using the outputs below for this data set, determine whether Angela should use the model with the high school data included, or the data without the high school data, and why.
A) It doesn't matter which she uses, the results are virtually the same in either case.
B) Angela should use the data that includes the high school information, because more information is always better than less information.
C) Angela should use the data that includes the high school information, because the calculated F value is lower.
D) Angela should include the high school data because the P-value is 0.977, close to 1.
E) Angela should exclude the high school data because the adjusted R-squared value is a little higher than in the data that includes the high school information.

Question

Angela Chou has been asked to investigate the determinants of poverty in Ontario communities. She collected data on 60 communities from Statistics Canada. She selected the percentage of poor persons living under the poverty line [Poor (%)], measured by Low Income Cut-Off, designed by Statistics Canada as a measure of poverty for a community, as the dependent variable. The independent variables selected are percent of single families in each community, the unemployment rate in each community, percent of population in the community holding a bachelor's degree as their highest level of education attained, and percent of population holding a High School Diploma as their highest level of education attained. Using the outputs below for this data set, determine whether Angela should use the model with the high school data included, or the data without the high school data, and why.    
A) It doesn't matter which she uses, the results are virtually the same in either case. 
B) Angela should use the data that includes the high school information, because more information is always better than less information. 
C) Angela should use the data that includes the high school information, because the calculated F value is lower. 
D) Angela should include the high school data because the P-value is 0.977, close to 1. 
E) Angela should exclude the high school data because the adjusted R-squared value is a little higher than in the data that includes the high school information.

Quizplus · Accepted Answer

The adjusted R-squared value is a measure of how well the model fits the data while adjusting for the number of variables included. The fact that the adjusted R-squared value is higher when high school diploma data is excluded suggests that this variable is not contributing much to the model's ability to explain poverty rates in Ontario communities. Therefore, it is better to exclude the variable and simplify the model.

Angela Chou Has Been Asked to Investigate the Determinants of Poverty