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Carbon Emissions 2009 Analysis using statistical software SAS.
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Do wealthy people around the world produce high
levels of carbon emissions?Statistics in Economics - Gurpreet Sidhu16th March 2012
• Carbon Emissions (GHG) – Combustion of Wood, Coal, Oil and Natural Gas
• 2009 – 41.5% of Total Carbon emission by United States and China
• 22 tonnes per person between US and China!
• Sympathetic to reducing personal carbon footprint• World needs to work together to slow down the green
house effect• Understand how different classes of society around the
world are contributing to this effect
Statistics in Economics - Gurpreet Sidhu16th March 2012 2
Motivation
Background
http://en.wikipedia.org/wiki/Greenhouse_gas
Statistics in Economics - Gurpreet Sidhu 316th March 2012
More Motivation – 1 tonne of CO2
http://www.freja.com/FRONTPAGE/Environment
Statistics in Economics - Gurpreet Sidhu 416th March 2012
Data Collection - 2009Variable Unit Source
Country Name
CO2 Emissions Million Metric Tonnes http://tonto.eia.doe.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=90&pid=44&aid=8
Country Area KM2 http://en.wikipedia.org/wiki/List_of_countries_and_outlying_territories_by_total_area
Population http://www.photius.com/rankings/population/population_2009_0.html
GDP per Capita $ http://www.enotes.com/topic/List_of_countries_by_GDP_%28nominal%29_per_capita
Environmental Performance Index (EPI)
Ranking Score 0 - 100 http://epi.yale.edu/epi2012/rankingshttp://en.wikipedia.org/wiki/Environmental_Performance_Index
Average Temperature Degrees Celsius http://www.cru.uea.ac.uk/~timm/cty/obs/TYN_CY_1_1.html
Population Growth Rate % per Year http://www.prb.org/pdf09/09wpds_eng.pdf
Life Expectancy Years http://databank.worldbank.org/ddp/home.do?Step=12&id=4&CNO=2
Urban Living Population % http://www.unicef.org/statistics/index_step1.php
Developed Country Binary (0-No, 1-Yes) http://en.wikipedia.org/wiki/Developed_country
Wealth of Country Binary by Quantile GDP per Capita (Poorest in Intercept, Poor, Wealthy, Wealthiest)
Statistics in Economics - Gurpreet Sidhu 516th March 2012
• Y variable is CO2 emissions• Data collected for top 100 CO2 emitting countries worldwide
X Variable Mean Min Max Skewness Kurtosis
land 936696.7 347 17098242 4.976018 28.670831
pop 45703222 109825 1166079217 7.965223 71.43029
gdpcap 19060.62 100 80943 1.0939 1.4609
epi 53.10206 25.30 76.7 -0.302 -0.342
temp 17.430 -5 28.8 -0.464 -0.747
popgrowth 1.2288 -0.8 10.3 2.9525 17.282
life 73.2164 46 83 -1.6396 3.3631
urbanpop 65.46 14 100 -0.5113 -0.2711
dev 0.3711 0 1 0.5419 -1.7427
Data Summary – Proc Univariates
• Skewness and Kurtosis = 0 if perfect Normal Distribution• Of interest land, population and popgrowth• With foresight investigation needed into land, population and gdpcap (R2 and beta)
Statistics in Economics - Gurpreet Sidhu 616th March 2012
Scatterplots
Min and Max Values
Skewed Distribution
China
United States
Statistics in Economics - Gurpreet Sidhu 716th March 2012
Scatterplots – transforming variables by taking logs
China
United States
Better Distribution
Min and Max Values
Collinearity
Statistics in Economics - Gurpreet Sidhu 816th March 2012
Mutliple Linear Regression• 99 Observations• Should drop ‘lnland’ due to
collinearity but will double check with p-value first
• Possible Interactions in the data I have added:
devlnland=dev*lnlanddevlnpop=dev*lnpop
Statistics in Economics - Gurpreet Sidhu 916th March 2012
Mutliple Linear Regression 2• p-values have
improved across variables
• still many insignificant p-values above 0.05
Statistics in Economics - Gurpreet Sidhu 1016th March 2012
Mutliple Linear Regression 3• still many
insignificant p-values above 0.05
Statistics in Economics - Gurpreet Sidhu 1116th March 2012
Mutliple Linear Regression 4• Good model• 99 Observations• R2 is 0.3241• EPI p-value = 0.07 is
questionable but we leave it in for now with benefit of foresight
• Use model to calculate studentized residuals for all observations
Statistics in Economics - Gurpreet Sidhu 1216th March 2012
Studentized Residual – Boxplot and ExtremesStudentized Residual = Residual / Standard Deviation of Residual
Outliers China and US need to be removed so that errors will be more normally distributed
China United States
Statistics in Economics - Gurpreet Sidhu 1316th March 2012
Mutliple Linear Regression 5 – No Outliers• 97 Observations• R2 now 0.5205,
previously 0.3241• p-value for epi much
better
Statistics in Economics - Gurpreet Sidhu 1416th March 2012
Mutliple Linear Regression 6 – Heteroskedasticity
• Parameter estimates all lie within Heteroskedasticity consistent 95% CI
• To fix this we use new standard errors to put into our regression model
Statistics in Economics - Gurpreet Sidhu 1516th March 2012
CO2 = -3239.86 + 147.20lnpop + 130.74lngdpcap – 4.87epi (31.43) (40.29) (2.78)
*** *** ***At 5% level there is significant evidence of:• Each 1% increase of lnpop, CO2 increases by 147/100• Each 1% increase in lngdpcap, CO2 increases by 130/100• Each 1 unit increase in EPI, CO2 decreases by 4.87
• gdpcap is an indicator for measuring wealth• So in answer to our original question, wealthy people do
emit more CO2
Conclusion