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Statistics Coursework. I am going to study the wealth of countries in the world (GDP) and what affects this. Hypothesis 1: Countries with a higher Index of Economic Freedom have a higher GDP per capita.
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Introduction
Statistics Coursework
Topic: Wealth of countries:
I am going to study the wealth of countries in the world (GDP) and what affects this. In today’s world there is a lot of difference in rich and poor countries and I am going to do my coursework on this topic. I will investigate 3 hypotheses. I’ll use secondary data on GDP from sources such as the World Bank.
Hypothesis 1: Countries with a higher Index of Economic Freedom have a higher GDP per capita.
Hypothesis 2: Countries in the Northern Hemisphere have a higher GDP per capita on average than countries in the Southern Hemisphere.
Hypothesis 3: On average the GDP of countries today are higher than they were 5 years ago.
Hypothesis 1: Countries with a higher economic freedom have a higher GDP per Capita
A higher economic freedom will probably mean there
Middle
79.2
56,427
7
1
36
Djibouti
52.3
996
39.5
36
12.25
Ecuador
55.4
3,312
32
27
25
Georgia
69.2
2,315
13
31
324
Germany
71.2
40,079
10
8
4
Greece
60.1
32,166
21
12
81
Guinea
52.8
487
36.5
45
72.25
Haiti
48.9
638
42
43
1
India
54.2
1,042
35
33
4
Israel
66.1
22,563
16
14
4
Italy
62.5
35,494
20
9
121
Ivory Coast
54.9
1,016
34
34
0
Japan
72.5
34,254
9
10
1
Kenya
59.6
786
23
41
324
Korea, North
3.0
1,114
50
32
324
Kuwait
68.3
33,687
14.5
11
12.25
Latvia
68.3
11,931
14.5
17
6.25
Conclusion
79.5
44,693
6
6
0
United States
80.6
45,790
1
5
16
Uzbekistan
52.3
830
39.5
40
0.25
Venezuela
45.0
8,303
44
21
529
Mean
59.7
14854.0
Σd²
7231.5
Σd² = 7231.5
6 x 7231.5 = 43389
n is the number of countries in my sample, 50.
n(n²-1)
50(50²-1)
50 x 2499
= 124950
rs = 1 – (43389/124950)
rs = 1 – 0.347
rs = 0.653
Therefore there is a positive correlation which is quite strong. On average countries with more economic freedom do indeed have a higher GDP per capita. However there are many countries, mainly in Africa concentrated at the lower end below $2000 GDP per capita, so the data is very positively skewed. The mean is low for both economic freedom and GDP Per capita. There are very countries with an index of economic freedom below 40, and these countries have a higher GDP per capita than countries with an index of economic freedom between 50 and 60 which is unusual. These are probably the countries with a communist government. The countries with the highest GDP per Capita also have very high economic freedom, and the countries with very low GDP per capita have less economic freedom, which proves the hypothesis correct, with some exceptions such as communist countries.
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