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GDP and Unemployment Regression Analysis

The document analyzes the relationship between GDP growth rate and unemployment rate using regression analysis and statistical tests. It finds a weak negative correlation between GDP and unemployment, but the regression model is not statistically significant for predicting future relationships.

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brmehta06
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67 views4 pages

GDP and Unemployment Regression Analysis

The document analyzes the relationship between GDP growth rate and unemployment rate using regression analysis and statistical tests. It finds a weak negative correlation between GDP and unemployment, but the regression model is not statistically significant for predicting future relationships.

Uploaded by

brmehta06
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Case 1: Regression analysis between GDP Growth rate (X) &

Unemployment rate (Y)


Hypotheses
Ho: GDP is not significant predictor for Unemployment rate
Ha: GDP is significant predictor for Unemployment rate
Test
Use of regression analysis for the correlation between the variables.
Use of F test & t test for the future predictability at level of significance 0.10.
Data Analysis
Table 6.1
YEAR
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011

Reliability Test

GDP RATE
7.59
4.3
5.52
3.99
8.06
6.97
9.48
9.57
9.32
6.72
8.39
8.39

UNEMPLOYMENT RATE
7.32
7.68
8.8
9.5
9.2
8.9
7.8
7.2
6.8
10.7
10.8
9.4

Reliability Statistics
Cronbach's Cronbach's

Alpha

Items

Alpha
Based

of

on

Standardize
d Item
.683

.626

From the above table we can say that the data of GDP rate & Unemployment rate are
reliable.

Statistical test
Regression Analysis:

X Y
XY n
X X
2

b
1

Y b1 X

Y X
b n
n
1

From the SPSS Software

Mode

Model Summary
R
Adjusted R Std. Error of

l
Square
Square
the Estimate
a
1
.255
.065
-.029
1.34861
a. Predictors: (Constant), GDP

ANOVAa
Sum of
df

Model

Squares
Regression
1.260
1
1
Residual
18.187
10
Total
19.447
11
a. Dependent Variable: unemployment
b. Predictors: (Constant), GDP

Mean
Square
1.260
1.819

Coefficientsa
Unstandardized
Standardize

Model

Coefficients
B

Std. Error

Sig.

.693

.425b

Sig.

d
Coefficients
Beta

(Constan

9.972
1.606
t)
gdp
-.176
.212
a. Dependent Variable: unemployment

-.255

6.208

.000

-.832

.425

Y b0 b1 X
where :

= the sample intercept 9.972

b = the sample slope - .176


1

Y = the predicted value of Y

They are forming following regression equation as mention below


Y

9.972 - .176

Where X = GDP rate


Y = Unemployment rate

Coefficient Of Correlation = -0.255


Coefficient of Determination = 0.065

Statistical Conclusions
As p value is greater than 0.10, null hypothesis is accepted.
Implications
GDP is responsible for the 6.5 % variation in the unemployment for the past data but as
our null hypothesis is accepted this correlation & regression model may not be true for
the future prediction.

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