Income and housing revisited. In Chapter 7,Exercise 31, we

Chapter 8, Problem 33

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Income and housing revisited. In Chapter 7,Exercise 31, we learned that the Office of Federal HousingEnterprise Oversight (OFHEO) collects data on variousaspects of housing costs around the United States. Heresa scatterplot (by state) of the Housing Cost Index (HCI)versus the Median Family Income (MFI) for the 50 states.The correlation is The mean HCI is 338.2, with astandard deviation of 116.55. The mean MFI is $46,234,with a standard deviation of $7072.47.a) Is a regression analysis appropriate? Explain.b) What is the equation that predicts Housing Cost Indexfrom median family income?c) For a state with what would be thepredicted HCI?d) Washington, DC, has an MFI of $44,993 and an HCIof 548.02. How far off is the prediction in b) from theactual HCI?e) If we standardized both variables, what would be theregression equation that predicts standardized HCIfrom standardized MFI?f) If we standardized both variables, what would be theregression equation that predicts standardized MFIfrom standardized HCI?