Economics regression analysis paper

For U.S. states (minimum 30 states) find cross sectional data on poverty rate, state transfer-payment spending per capita and state unemployment rate.

a. Present data in a table (relegated to an appendix);

See appendix

b. State expectations and set up hypotheses and speculate on type I and type II errors of the coefficients wherever possible,

Transfer payments are fees that the government or business pays to individuals for free to increase their income and purchasing power. Most of the government's transfer payments are characterized by welfare expenditures. So our first expectation is that the more state transfer payments, the lower the poverty rate in the state. However, we still make two mistakes. One is that our assumptions are wrong, but the statistical calculations show that we have no good reason to reject the null hypothesis that the more the state government transfers payment, the more poverty there is in the state. Another mistake is that our null hypothesis may be correct, but the statistical results show that we may need to reject the null hypothesis. For example, in the long run, the government's welfare policy can not completely change the state of poverty, but it is counterproductive, more and more People expect the help of the government and do not change the status quo from their own efforts.

If a person is unemployed, it means that he has no material source. It can be seen that the higher the unemployment rate, the higher the poverty rate. However, we still make two mistakes. One is that our null hypothesis is wrong, but the statistical calculations show that we have no good reason to reject the null hypothesis that the higher the unemployment rate, the lower the poverty rate. Another mistake is that our null hypothesis may be correct, but the statistical results show that we may need to reject the null hypothesis. For example, although a person is unemployed, he can still be self-sufficient to meet the individual's living needs.

c. Run two regressions:

1. One with poverty line being the dependent variable and State-unemployment rate being the independent variable; present the result as it is done conventionally including the supporting information such as statistics, R-square and the number of observations,