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Exercise 1

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14 views3 pages

Exercise 1

Uploaded by

else.dyrnes
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Exercise 1

### Question 1. Export your bubble chart and insert it into a separate answer document.

Bibliography
(n.d.).

### Question 2. Describe the relationship between gdp per capita and life expectancy.
We can see that there is a strong positive correlation between GDP per capita and life
expectancy, and it is concave. This makes sense according to microeconomic theory, where
we assume decreasing marginal utility. The countries with a life expectancy of over 75 years
have a much wider spread in GDP per capita. This indicates that life expectancy increases
only to a certain level of GDP per capita. After this, there may be other factors that are more
important, like lifestyle, health care, life satisfaction. Also, the chart does not say anything
about the distribution of the GDP among the population. A small percentage may hold most
of the GDP, which means the rest of the population may be very poor.

### Do you think that the relationship should be interpreted as causal?


Economic growth (increase in GDP) is necessary to get rid of poverty, but an increase in GDP
does not necessarily remove poverty (Assuming that this increases life expectancy). This
means that there may be a one-way causal relationship between the two. But we do not
have enough proof to assume this.

### Question 3. We have re-created the graph that you can find here:
# https://ourworldindata.org/grapher/life-expectancy-vs-gdp-per-capita
# But ours looks slightly different, why?
The graph in the link is adjusted for inflation and differences in cost between the countries.
We can see that this graph is more linear. This is because most of the countries with low GDP
also have low living costs (compared to high GDP countries). This adjustment shows the real
purchasing power of the population in the given country, and we can see that the low
income countries is placed higher on the GDP-axis.

### Question 4. Change the x variable from `GDP per capita` to gdp_pc_logged and create
the bubble chart again.
### Is the graph more or less like the one at Ourworldindata now?

This is more like the one at Ourworldindata.


### From now on, we look only at the graph with logged gdp per capita on the x-axis.

### Question 5. North Korea and Equatorial Guinea are outliers. What does that mean?
North Korea and Equatorial Guinea are outliers because they deviate from the correlation.
North Korea have a relative high life expectancy relative to GDP, and Equatorial Guinea have
a relative high GDP and low life expectancy.

### Why do you think these countries are outliers?


There is a high degree of inequality in Equatorial Guinea, which may explain the low life
expectancy. The country hold large reserves of oil, which has given a dramatic increase in
government revenues. However this is not distributed to the population. Brutal regimes has
ruled for many years, and diminished the potentil for agricultural growth. Agriculture is the
main source of employment. It is also a high child-mortality in central Africa, because of both
hunger and diseases (for example malaria).
In North Korea, the case is opposite. These numbers are probably not trustworthy, given the
information we have of the hunger and economy. Assuming this is true, the government
probably wants us to think that they are taking care of the inhabitants.
### Question 6. Now, select only countries in Africa. The relationship between
### gdp per capita and life expectancy is not as linear here. Why do you think that is?

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