Angela Chou Has Been Asked to Investigate the Determinants of Poverty

question 21

Multiple Choice

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. Given the regression equation Poor (%) = -3.81 + 0.798 Single-Families (%) + 0.624 Unemployment Rate (%) - 0.170 Bachelor's Degree (%) - 0.003 High School (%)
Interpret the numbers 3.81 and 0.798.

• A) As the % of Single Families in an Ontario community increases, the % of poor families increase as well, with a maximum of 3.81% of the population being poor.
• B) As the % of Single Families in an Ontario community increases, the % of poor families decrease.
• C) There are 3.81% poor families and 0.798 Single-Families in Ontario communities.
• D) 3.81 is the y-intercept. When all of the dependent variables have a value of zero, we can expect that 3.81% of the community to be poor. 0.789 indicates that for an extra 0.789% of poor families in a community, we can expect that the % of single families will increase by 1%.
• E) When all of the independent variables have a value of zero, we can expect that -3.81% of the community to be poor, i.e. 0%. The 0.798 indicates that for each extra % of single families in a community, we can expect that the % poor will increase by almost 0.8%.

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