Question

Lets that that you are interested in neighborhood crime rates and you think that poverty should lead to higher crime rates. List at least three rival explanations that you would include in your empirical analysis. Briefly explain why you would include these. Now lets say that we randomly selected 15 neighborhoods and captured their crime rates, levels of poverty, and police presence. Using the data answer the following questions: a. Is the relationship between crime and poverty statistically significant? b. Is the relationship between crime and poverty significant when controlling for police presence? c. How would you best describe the relationship between crime, poverty, and police? Would this be spurious, additive, or interactive? Why?

Observations	Crime Rate	Income	Police
1	Low	High	High
2	Low	High	High
3	Low	High	Low
4	Low	Low	High
5	Low	Low	Low
6	High	Low	High
7	High	Low	Low
8	Low	High	Low
9	Low	Low	High
10	Low	High	Low
11	High	Low	High
12	High	Low	High
13	High	Low	Low
14	High	Low	Low
15	High	Low	Low

There is no other information given

Answer 1

Ans a)

Relationship Between Crime And Poverty is Really Significat As from the data given in the Question, there is total 10 Neighborhood where Income Is low, and out of These 10 in 7 Neighborhood Crime Rate is High , which makes it to 70% shown Below:-

Observations	Crime Rate	Income
4	Low	Low
5	Low	Low
6	High	Low
7	High	Low
9	Low	Low
11	High	Low
12	High	Low
13	High	Low
14	High	Low
15	High	Low

b) Relationship Between Crime And Poverty is still Significat when presence of police is there, As from the data given in the Question, there is total 5 Neighborhood where Income Is low & Police Presence is also high and out of these 5, Crime Rate is High in 3 neighborhood, which makes it to 60% shown Below:-

Observations	Crime Rate	Income	Police
4	Low	Low	High
6	High	Low	High
9	Low	Low	High
11	High	Low	High
12	High	Low	High

c) Relationship Btw Crime, Income & Police :-

1) Whenever income is high, there is always crime rate is low

2) Whenever one of the two , whether income is high or Police presence is there, there is more chances that crime rate is low.