HDI Revisited.
The United Nations Development Programme (UNDP) uses the Human Development Index (HDI) in an attempt to summarize in one number the progress in health, education, and economics of a country. The number of cell phone subscribers per 1000 people is positively associated with economic progress in a country. Can the number of cell phone subscribers be used to predict the HDI? Here is a scatterplot of HDI against cell phone subscribers:
a) Explain why fitting a linear model to these data might be misleading.
b) If you fit a linear model to the data, what do you think a scatterplot of residuals versus predicted HDI will look like?