Question

3. The following Table depicts the Misery Index for the years 2007 through 2016, along with Full-Time Equivalent (FTE) enrollment at FVCC, and the valley’s unemployment rate. The Misery Index is the summation of inflation and unemployment rates of growth. The higher the Misery Index, the higher are price level inflation and unemployment.

Year	Annual Misery Index	FY Annualized FTE at FVCC	Unemployment Rate (%) Flathead County
2007	7.47	1,264	4.0
2008	9.65	1,360	6.7
2009	8.94	1,557	11.8
2010	11.27	2,076	12.1
2011	12.11	2,105	11.0
2012	10.15	1,920	9.0
2013	8.86	1,781	7.7
2014	7.80	1,626	6.5
2015	5.40	1,526	5.7
2016	6.13	1,472	5.6

(a) Is this Correlation or causation? Explain. (b) Are there any relationships worth explaining? If yes, please explain.

Answer 1

a]

Since, the calculation of Annual Misery Index partly includes Unemployment Rate (%) Flathead County, there exists moderate positive correlation with value 0.768 and the relation is clearly Causal.

Also, moderate positive correlation with value 0.760 is found between FY Annualized FTE at FVCC and Unemployment Rate (%) Flathead County.

According to studies, during unemployment, the money that could be earned by someone by working instead of learning is close to zero. So, it wouldn't harm someone if they join college instead of working. Also, in some cases, financial aids are given to students which might support them for a while. Thus, maybe, that is the reason for high enrollment when unemployment is high.

b]

Even though the inflation tends to decrease college enrollments due to increase in tuition fees, study materials, etc; here, the unemployment rate is masking its effects.