A recent study found that American consumers are making average monthly debt payments of around $1,000 (Source: Experian.com, November 11, 2010). However, the study of 26 metropolitan areas reveals quite a bit of variation in debt payments, depending on where the consumer lives. For instance, in Washington DC, residents pay the most ($1,285 per month), while Pittsburgh residents pay the least ($763 per month). Madelyn Davis, an economist in a large bank, believes that income differences between cities are the primary reason for the disparate debt payments. For example, Washington DC’s high incomes have likely contributed to it placement on the list. She is also unsure about the likely effect of unemployment rate on consumer debt payments. In order to analyze the relationship between income, unemployment rate, and consumer debt payments, Madelyn collected data from the same 26 metropolitan cities used in the earlier debt payment study. Specifically, she gathered each area’s 2010 – 2011 median household income (recorded in thousands of dollars)1 as well as the monthly unemployment rate and average consumer debt for August 2010. 

The Excel file Debt_Payments.xlsx has the data. 

Madelyn would like to use this sample data to understand the relationships between (1) debt payments and income, and (2) debt payments and unemployment rate. 

 Phase 1 (Proposal): Please complete the following tasks for this phase: 

a) Describe the problem background and purpose of the study 

b) Describe the variables included in the case 

c) Use appropriate descriptive statistics to explore and summarize the data, both numerical and graphical. Remember to interpret the findings accurately and present them in a clear and coherent way. 

Phase 2 (Final report): Please complete the following tasks for this phase: 

a) Describe the problem background and purpose of the study 

b) Describe the variables included in the case 

c) Outline the statistical methods required to answer the research questions 

d) Apply the statistical methods to answer both research questions 

       a. Follow all steps required to conduct a complete analysis and validation of methods, including assumption checks 

e) Presentation of the results and their interpretations 

       a. If using multiple models, perform a comparison to select the best one. Justify your choice. 

f) Final conclusions, decision-making and recommendations based on the results to the economist 

 

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Why is risk management important?  Is there a difference between risk management and risk analysis?  Please be sure to explain why.  Atleast 300 words.

I need an 

1. Initial post 

2. Two response posts 

Please follow the discussion guidelines below:

Initial Post 

The post length may vary by discussion topic or activity, but in general, the post length should be between 1-5 paragraphs (3-5 lines per paragraph) long. It’s helpful to keep posts concise when in an online forum, as reading large amounts of text online can be straining, both for your eyes and mind. Additionally, it can be time consuming to read many long posts. However, the post should not be too short either. For more information regarding what criteria the substance of the post is based on, see the Discussion Board Rubric. Subject Line The subject line should reflect the topic being discussed. The subject line is important because many people decide whether or not to read a message or posting based on the title. The subject here should be short and relevant, but draw other readers in and make them want to read what you have to say. Take a minute: Before posting, take a minute to review the discussion topic and make sure you understand what is required before responding. If you have a question about what it is that you are supposed to post, ask your instructor for some clarification. 

Response Post 

Two response posts are required for each discussion topic. Each Response post should generally be about a paragraph (3-5 lines) or less in length. 

 

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