Coffey 1

Austin Coffey
9/12/13
Kiker
Pre Calculus
Relating Business Firms Per Capita and
Income Per Capita; California

This correlation is not as random as it might seem at first glance. I wanted to draw on my
own experiences and life when determining my project data, while similarly finding information
well fitting a non-linear regression model. In both of these cases, I for the most part succeeded.
This past summer saw me work at Hotze Runkle, PLLC (Professional Limited Liability
Company), an asbestosis-litigation law firm, where I filed more affidavits than I previously
thought existed. This gave me the idea to use law firms per capita to measure wealth per capita.
California was chosen as a result of its large population and counties. Upon having found a
model for my plotted data, however, it was made known to me that the U.S. Census was using
firm under the definition of "the name or title under which a company transacts business
(Webster, Merriam)" and my variable changed accordingly.
In California itself, there is a power regression with an r2 value of .701. While this is not
an exceptionally accurate relation, there are several factors contributing to its semi-inefficient
model, chief among them being the presence of interminably many outside factors that make up
the complex economy of the United States and henceforth California. When an entrepreneur is
considering the opening of a new business, they can use the equation y=352895x1.01 to determine
the approximate income per capita as a function of businesses per capita. Substituting the values
of .075, .09, and .10 as businesses per capita, for example, produces the corresponding per capita

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incomes of 25790, 31004, and 34486.

California Business Firms Economic Impact

50000
45000
40000
35000
30000
25000
Income Per Capita
20000
15000
10000
5000
0
0.04

f(x) = 352895.26 x^1.01

R = 0.7

0.06

0.08

0.1

0.12

Business Firms Per Capita

0.14

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As to its functionality in the real world, there is no situation in which less economic
information is better. Anyone hoping to start a business, open a new branch, invest in a public
company, or even move to a new home where they'll feel comfortable needs to know their
market. Financial advisors need to know where businesses are failing and succeeding to help
their clients see trends in the stock market and know where to invest, what to sell, and when to
reinvest dividends. (Trick question- always reinvest dividends.) And while it's true that simply
modeling businesses per capita vs. income per capita is by no means the end all be all of
economic success, it is still something to take heed of. The technological and information
sectors of the economy are the businesses of the future, and financial advisors play an important
role in both of those, an integral part of the modern market.
Entertainment, information, and finance creates the wealth of the future, and financial
advisors are set up to gain in prominence as we move further from industry. While nothing as
mercurial as inter-sector relationships and consumer desires can ever be predicted with great
accuracy, it's not much of a stretch to assume the world will continue to walk the path it's chosen
short of a game-changing leap forward or relapse backward. Hence, it would make great sense to
set oneself up to succeed in one of those three industries- or two, as members of the wealth
management industry have done.

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Works Cited
United States. US Department of Finance. US Census Bureau. California Quickfacts.
n.p., Census 2010. Web. 8 Sept. 2013.