EXAMPLE 2.9 World Financial Markets
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The World Economic Forum studies data on many variables related to financial development in the countries of the world. They rank countries on their financial development based on a collection of factors related to economic growth.9 Two of the variables studied are gross domestic product per capita and net assets per capita. Here are the data for 15 countries that ranked high on financial development:
| Country | GDP | Assets | Country | GDP | Assets | Country | GDP | Assets |
|---|---|---|---|---|---|---|---|---|
| United Kingdom | 43.8 | 199 | Switzerland | 67.4 | 358 | Germany | 44.7 | 145 |
| Australia | 47.4 | 166 | Netherlands | 52.0 | 242 | Belgium | 47.1 | 167 |
| United States | 47.9 | 191 | Japan | 38.6 | 176 | Sweden | 52.8 | 169 |
| Singapore | 40.0 | 168 | Denmark | 62.6 | 224 | Spain | 35.3 | 152 |
| Canada | 45.4 | 170 | France | 46.0 | 149 | Ireland | 61.8 | 214 |
In this table, GDP is gross domestic product per capita in thousands of dollars and assets is net assets per capita in thousands of dollars. Figure 2.9 is a scatterplot of the data. The correlation is . The scatterplot includes a regression line drawn through the points.
Figure 2.9: FIGURE 2.9 Scatterplot of GDP per capita and net assets per capita for 15 countries that rank high on financial development, Example 2.9. The dashed line indicates how to use the regression line to predict net assets per capita for a country with a GDP per capita of 50.