Assignment:
Task
A. Find the top 5% value and the bottom 5% value of the household's annual after-tax income (AtaxInc). What do these two values imply?
B. The series Own House represents whether a household owns a house or not. Let X be a random variable such that X = Number of households who own a house.
(i) Is this a quantitative or a qualitative variable?
(ii) What would be the probability distribution of this random variable if we choose randomly (a) Only 1 household? (b) 250 households? Provide any relevant condition(s) to justify your answer.
C. Draw a scatter plot of natural log of total expenditures against the natural log of after-tax income, that is, ln(texp) against ln(ataxinc) and compute the coefficient of correlation. Express your finding of the relationship between the two variables.