The test found the presence of correlation, with most significant independent variables being education and promotion of illegal activities. Now, the next step is to perform a regression test.
Correlation is a statistical measure that helps in determining the extent of the relationship between two or more variables or factors. For example, growth in crime is positively related to growth in the sale of guns. Growth in obesity is positively correlated to growth in consumption of junk food. However, growth in environmental degradation is […]
Malmquist productivity index evaluates the efficiency change over time as mentioned by Färe, Grosskopf, & Margaritis, (2011). However, Malmquist productivity index literature has been uneven with some authors assuming constant returns to scale and others allowing for variable returns to scale.
In the previous article on Linear Regression using STATA, a simple linear regression model was used to test the hypothesis. However the linear regression will not be effective if the relation between the dependent and independent variable is non linear.