Introduction to Quantitative Methods for Economics

Running head: ECONOMICS AND QUANTITAIVE ANALYSIS
Economics and Quantitaive Analysis
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ECONOMICS AND QUANTITAIVE ANALYSIS1
Table of Contents
Purpose.......................................................................................................................................2
Background................................................................................................................................2
Method.......................................................................................................................................2
Result..........................................................................................................................................3
Analysis of descriptive statistics............................................................................................3
Analysis of scatter plot...........................................................................................................4
Analysis of regression model.................................................................................................5
Discussion..................................................................................................................................7
Recommendation........................................................................................................................8
References List...........................................................................................................................9

ECONOMICS AND QUANTITAIVE ANALYSIS2
Purpose
The paper conducts an economic analysis to understand the association of life
satisfaction with income. The purpose is to correctly identify the direction of the relation and
make clear policy implication.
Background
Study of life satisfaction was one central theme of different studies in the field of
American Social Indicator in 1970s. Eastelin conducted a study on life satisfaction and
economic growth during this time and arrived at the conclusion that average income does not
have any significant impact on life satisfaction (Kim, Linton and Lum 2015). Studies were
also conducted out of USA. Richard A in 1995 observed that individual happiness and life
satisfaction is one important part of life satisfaction. During early nineties, research on
relation between life satisfaction and income have become an important area of research.
Some cross sectional and panel studies supported a positive relation of life satisfaction with
average income. Though GDP was initially thought of as an important determinant of life
satisfaction one paper in the early twenty first century concluded that there is only a marginal
positive impact of GDP on life satisfaction after $10,000. A similar result was obtained in a
paper made by Stevenson and Wolfers (Meyer and Dunga 2014). Given the differences in
findings of different research paper continuous researches are carrying out in this field.
Method
Use of appropriate data analysis method is the key to reach reliable result. The first
step is to collect data on selected indicators. The paper aims to evaluate association of life
satisfaction with average income. For average income data on annual per capita GDP are
collected. As a measure of life satisfaction data are collected on life satisfaction scores. The