Develop a scatter diagram with GDP per capita as the independent variable. What does thescatter diagram indicate about the relationship between the two variables?

1ECONOMICS AND QUANTITATIVE ANALYSIS LINEAR REGRESSION REPORT

As an economist working in the OECD you have been asked to prepare a short report that examinesthe statistical association between average life satisfaction and GDP per capita using the datacontained in the spreadsheet (linear regression assignment data).Your report needs to be structured as follow:1. Purpose (2 marks)In this section, the purpose of the report needs to be clearly and concisely stated.2. Background (4 marks)In this section, a brief literature review on the association between life satisfaction and GDP isrequired. Why are economists interested in this particular issue?3. Method (4 marks)In this section, the data source and empirical approach used to examine the relationship between lifesatisfaction and GDP needs to be detailed.4. Results (20 marks)In this section, you need to present and summarize the results from your statistical analysis. Inparticular, the results section must:? Provide a descriptive analysis of the two variables (e.g., mean, standard deviation, minimumand maximum). Which countries have the lowest and average life satisfaction scores? Whichcountries have the lowest and highest GDPs per capita? (2 marks).? Develop a scatter diagram with GDP per capita as the independent variable. What does thescatter diagram indicate about the relationship between the two variables? (3 marks).? Develop and estimate a regression equation that can be used to predict average lifesatisfaction given GDP per capita. (2 marks).? State the estimated regression equation and interpret the meaning of the slope coefficient (tomake the interpretation easier multiply the estimated coefficient by 10,000). (3 marks).? Is there a statistically significant association between GDP per capita and average lifesatisfaction? What is your conclusion? (2 marks).? Did the regression equation provide a good fit? Explain. (3 marks).? Luxembourg, Ireland, and Norway appear to be outliers in terms of GDP per capita. Reestimateyour regression model without Luxembourg, Ireland, and Norway. How does thisaffect the slope coefficient and goodness of fit? Explain. (5 marks).5. Discussion (5 marks)In this section, provide a brief overview of the results. What are the key strengths and limitations ofthis analysis? (e.g., data, method, etc.). How do the results from this analysis compare with otherstudies? (e.g., are the findings consistent?). Do these findings have clear policy implications?6. Recommendations (5 marks).In this section, you should present three to five well-considered recommendations.Please ensure that your report is submitted as a single file.