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Summary Of The Effect Of Crime Frequency On Median Household Income

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ECON471 Introduction to Applied Econometrics 2014 Fall Semester Professor. Gouda Abedel-Khalek Final Report on Project: Analysis of the Effect of Crime Frequency on Median Household Income Group 2: James Kerns Andrew Szmurlo Tong Lin Alessandro Tesauro Table of Contents I. Introduction 3 II. Variables 3 III. Literature 5 IV. Model & Hypotheses 8 V. Data 9 VI. Regression Analysis 11 VII. Results: Summary and Implications 19 VIII. Conclusion 20 Bibliography 21 Introduction Our research project examines the connection between income levels (with median household income) in Illinois cities and the frequency of crime in that city, while accounting for other pertinent variables, such as the average education of the city’s population …show more content…

In order to test the truth of our hypothesis, we compiled a cross-sectional data set using public resources provided by the United States Census Bureau, and converted them into Stata format (as we have been doing in class). After rigorously checking the data set we had gathered for issues that would impact the significance of a regression analysis such as multicollinearity, we concluded that the data set showed no serious issues and proceeded to test different transformations of the dependent and independent variable, before settling on the most significant and logical options. We then carried out the process of economic analysis, checking to see if our results for their logical consistency as well as economic validity, fine-tuning our regression in order to garner the most rigorous interpretation of the data. After extensive work our analysis reached not only highly significant, but also highly satisfying results, yielding a confirmation of both our hypothesis of the relationship between the frequency of crime and household income, but also our auxiliary expectations for the coefficients of the other independent variables. Variables Our goal in this project was primarily to examine the role that the frequency of crime played in the income levels of Illinois cities. In order to do this however, we first had to choose some

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