Scatter Plot

Another way to get acquainted with the data set is plotting. In order to see the relationship (or lack thereof) between the dependent and explanatory variables. Since Sex is a dummy variable (meaning not a genuine variable), we will ignore it for the moment and go on plotting Income and Education.

The most useful way to detect a relationship is to plot the data in a scatter plot diagram. In order to do this with Excel, select the data range and select Chart... option from Insert menu. You will be directed to step 1 of the chart wizard. Do the following:

1. Click on Standard Types tab.
   • Chart type: $\Rightarrow$ XY (Scatter)
   • Chart sub-type: $\Rightarrow$ Scatter
   • Click to move on to step 2.
2. Click on Series tab.
   • Series $\Rightarrow$ Click on Sex $\Rightarrow$ Click
   • X Values: $\Rightarrow$ Click on right next to the text box for X Values. The dialogue box shrinks to facilitate the selection of data range.
   • Select the Education column excluding the label this time.
   • Click on to return to the normal view.
   • Y Values: Rightarrow Similar to X Values: This time, select Income column. You may wish to change the name of the series to Income. This is nonessential, but it can be done by typing Income in the text box to the right of Name:
   • Click and then to exit the wizard.
3. Make changes the features of the chart if you will.

The end result should look something like the one shown below:

You may detect a positive relationship between Education and Income, which may or may not be statistically significant.

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