In this paper, I will analyze the per capita disposable income. I will take China as an example, try to find the relationship between per capita disposable income and economic development and some other factors. Per capita disposable income is used to refer to the disposable income of per capita residents. Resident disposable income is the sum of residents' available for final consumption expenditure and savings, that is, income that residents can use for discretion. Per capita disposable income itself is an important indicator of standard of living.
The main factors affect per capita disposable income are as follows:
Per capita GDP - which is affecting an important factor to the per capita disposable income. (because it reflects the development degree)
Total family size - The bigger the total family size, the less disposable income is in the case of equal income.
Average number of employed people per household and per capita gross income – which have positive ratio with the per capita disposable income.
Model
Y=β0+β1X1+β2X2+β3X3+β4X4+u
Y- per capita disposable income
X1- Per capita GDP
X2- Total family size
X3- Average number of employed people per household
X4- per capita gross income
Assess
The data we use would be from 1969 to 2016 and will use the data in 2017 as an inspection.
Professor’s email
I’ve read through your proposal and here are some quick comments:
[1]. In general, I think the project is below the standard for a master level project. Your model is just a multiple linear regression without considering any advanced topics we have discussed so far (panel data, omitted variable bias, diff-in-diff, dummy variables, etc.). If this is an undergraduate work, it is OK. But for a graduate work, this is below the bar.
[2]. Writing. Your whole proposal only have fewer than 20 lines but there are numerous grammatical errors. For example, in line 2, it should be “trying to find…”; line 11, “the less disposable income” should be “the lower…”. You will need to bring your final work to a tutor in the writing center located in the Tilton library to polish it before submission.
[3]. Through out your whole proposal, you keep talking about GDP per capita, disposable income per capita, but which country are you working on? US? UK? China? What is your data source? World Bank? United Nations?
[4]. Your model is too simple. How can it be possible to explain the variation in per capita disposable income with just four factors? I am not saying you should use very complicated or innovative models, but you should provide some insightful analysis about pros and cons of your current model, and show me your effort to alleviate the threats of the omitted variable bias.
If you still want to work on this project, please get started quickly and carefully think about the comments I listed above. And feel free to let me know if you have any questions.
Sample Solution