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Using Microsoft Excel, a regression test was administered for each individual independent variable as it related to the dependent variable of general unemployment in Detroit.
Data Square
Automotive Industry Employment rates in thousands
Year
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Annual
2002
2003
2004
2005
2006
2007
2008
96.9
2009
79.5
86.6
86.2
85.4
77.2
73.4
73.5
80.5
84.3
83.9
82.8
83.9
81.4
2010
82.7
82.7
82.6
83.3
83.8
85.0
81.2
83.3
87.6
89.4
89.8
90.2
85.1
2011
89.4
90.4
91.2
93.1
93.4
94.1
83.3
92.0
94.7
96.3
96.7
97.4
92.7
2012
97.6
98.2
99.3
97.4
98.5
99.5
95.8
96.8
97.7
97.7(P)
P: Preliminary
(United States Bureau of Labor Statistics 2012)
Year
Period
labor force employment unemployment
OUTPUT
Regression Statistics
Multiple R
0.872748
R Square
0.761689
Adjusted R. Square
0.7319
Standard Error
1.573775
Observations
10
ANOVA
df
SS
MS
F
Significance F
Regression
1
63.32986
63.32986
25.56956
0.000981
Residual
8
19.81414
2.476768
Total
9
83.144
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0%
Upper 95.0%
Intercept
18.60066
1.703969
10.91608
4.4E-06
14.6713
22.53002
14.6713
22.53002
X Variable 1
-0.14215
0.028112
-5.05663
0.000981
-0.20698
-0.07733
-0.20698
-0.07733
RESIDUAL OUTPUT
Observation
Predicted Y
Residuals
Standard Residuals
1
6.432287
0.867713
0.584803
2
7.398934
1.201066
0.80947
3
0.652338
Standard Error
Observations
3
ANOVA
df
SS
MS
F
Significance F
Regression
1
1.35E+08
1.35E+08
4.752715
0.273788
Residual
1
28345534
28345534
Total
2
1.63E+08
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0%
Upper 95.0%
Intercept
170848.9
19965.3
8.557288
0.074059
-82834.4
424532.1
-82834.4
424532.1
X Variable 1
-1093.39
-2.18007
0.273788
-7466.07
-7466.07
RESIDUAL OUTPUT
Observation
Predicted Y
Residuals
Standard Residuals
1
118365.9
-57.9129
-0.01538
2
132689.4
-3735.38
-0.99222
3
132470.7
1.007603
It is clear that there are significant factor that affect the unemployment rate. As predicted, the direct employment of the three major automakers has the biggest role in affecting unemployment. As the direct employment rate goes down, the unemployment rate increases. However, it was also shown that there is not a significant correlation between automaker profits rising and unemployment rates in the region going down. This is most likely explained because of the major outsourcing the three companies are doing, costing Detroit communities a rising unemployment level.
References
United States Bureau of Labor Statistics. (2012). Local area unemployment statistics: Detroit-Lionia-Dearborn. Databases, Tables, & Calculators by Subject. United States Department of Labor. Web. http://data.bls.gov/timeseries/LAUDV26198003?data_tool=XGtable
United States Bureau of Labor Statistics. (2012). Motor vehicle parts manufacturing. Databases, Tables, & Calculators by Subject: State and Area Employment, Hours, and Earnings. United States Department of Labor. Web. http://data.bls.gov/timeseries/SMU26000003133630001?data_tool=XGtable
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