Colorado State University Global Campus Correlation & Regression Discussion

Read Example 2 and explain your take away. Add additional information. Your document should include minimum 200 words plus credible references.

Example 2:

Saving for retirement has become more interesting as I get older, especially the different options that are available. In an article by Yau (2020) there are scatterplots provided to show the dependent x variable of age against the independent y variable of savings, and multiples of income depending on the graphs that are featured in the article. The scatter plots are panel data, because they represent the savings amounts of multiple people over a period of time, 20 years old to 65+, compiled by the Survey of Consumer Finances from the Federal Reserve Board (Yau, 2020). The graphs can be adjusted to show retirement savings, financial assets, and net worth, which will reorganize the plotted points on the scatter plot depending on what type of savings, offering an indication that there are different correlations between the types of savings (Yau, 2020). The third graph features recommended savings, and where the percentage of data corresponds to the recommend savings suggested by Fidelity, a retirement investment company (Yau, 2020). While the recommended savings line in not necessarily a best fit line, the data could certainly be used to show a linear equation and fine a line of best fit, which may give an idea of what the data shows in response to the recommended savings line (Holmes et al., 2017). The independent variable appears to increase in response to an increase of the dependent variable, showing that individuals tend to accumulate more savings as they grow older, though Holmes et al. (2017) does mention that correlation does not mean causation. The article appears to use correlation to show that while savings may increase with time, it may not be substantial enough to match what one desires from their retirement. Below is a link to the article if anyone wishes to look at it:

https://flowingdata.com/2019/11/08/saving-for-reti…

Holmes, A., Illowsky, B., Dean, S., & Hadley, K. (2017). Introductory business statistics. Houston, TX: OpenStax. Retrieved from https://openstax.org/details/books/introductory-bu… CC BY v4.0

Yau, N. (2020). Saving for retirement and age. Flowingdata. https://flowingdata.com/2019/11/08/saving-for-reti…