Resource Environmental Economics Assignment Example | Topics and Well Written Essays - 2000 words

Resource Environmental Economics - Assignment Example Nevertheless, the opposite situation is also possible. NOX variable reflects the pollution level in the area. The 'dirtier' in terms of pollution a town is, the less would the demand for housing in it be. Therefore, I expect nitric oxides concentration variable to be negatively correlated with price of houses and the corresponding coefficient to have negative sign. For the CHARLES variable which takes only two possible values of 0 and 1 calculation and interpretation of mean and standard deviation would be misleading. Count and frequency describe this particular variable better. Out of 506 entries, 471 (93.08% of total) correspond to 0-value of CHARLES variable and houses that do not bound the river. CHARLES is equal to 1 for 35 entries (6.92% of total). LSTAT variable demonstrates absence of correlation with CHARLES. Position of houses near a river and percentage of the lower status population in the area do not depend on each other. It is quite logical because the former is determined by the geographical factors while the latter is more of social nature. LSTAT is moderately correlated with PTRATIO, CRIME, RAD (positive correlation), and DIS (negative correlation). Based on the correlation coefficient it cannot be determined which variable influences which. For example, we can assume that high percentage of lower status of the population leads to increase in crime rates because of high poverty levels. However, it can also be argued that the relationship between variables goes in the opposite direction and