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Do New Jersey banks serve minority communities? Financial
Chapter 11, Problem 105SE(choose chapter or problem)
Do New Jersey banks serve minority communities? Financial institutions have a legal and social responsibility to serve all communities. Do banks adequately serve both inner-city and suburban neighborhoods, both poor and wealthy communities? In New Jersey, banks have been charged with withdrawing from urban areas with a high percentage of minorities. To examine this charge, a regional New Jersey newspaper, the Asbury Park Press, compiled county-by-county data on the number (y) of people in each county per branch bank in the county and the percentage (x) of the population in each county that is minority. These data for each of New Jersey’s 21 counties are provided in the table below.
a. Plot the data in a scatterplot. What pattern, if any, does the plot reveal?
b. Consider the linear model \(E(y)=\beta_0+\beta_1x\). If, in fact, the charge against the New Jersey banks is true, then an increase in the percentage of minorities (x) will lead to a decrease in the number of bank branches in a county and therefore will result in an increase in the number of people (y) per branch. Will the value of b1 be positive or negative in this situation?
c. Do these data support or refute the charge made against the New Jersey banking community? Test using \(\alpha\ =\ .01\).
Questions & Answers
QUESTION:
Do New Jersey banks serve minority communities? Financial institutions have a legal and social responsibility to serve all communities. Do banks adequately serve both inner-city and suburban neighborhoods, both poor and wealthy communities? In New Jersey, banks have been charged with withdrawing from urban areas with a high percentage of minorities. To examine this charge, a regional New Jersey newspaper, the Asbury Park Press, compiled county-by-county data on the number (y) of people in each county per branch bank in the county and the percentage (x) of the population in each county that is minority. These data for each of New Jersey’s 21 counties are provided in the table below.
a. Plot the data in a scatterplot. What pattern, if any, does the plot reveal?
b. Consider the linear model \(E(y)=\beta_0+\beta_1x\). If, in fact, the charge against the New Jersey banks is true, then an increase in the percentage of minorities (x) will lead to a decrease in the number of bank branches in a county and therefore will result in an increase in the number of people (y) per branch. Will the value of b1 be positive or negative in this situation?
c. Do these data support or refute the charge made against the New Jersey banking community? Test using \(\alpha\ =\ .01\).
ANSWER:Step 1 of 7
a)
Obtain a scatterplot of the number of people per bank branch (y) and percentage of minority population (x).
MINITAB procedure:
Step 1: Choose Graph > Scatterplot.