Part 1                         (100 points)

Analyze the data in the CreditCard dataset in AER package. (Note that you have to install AER package and any other additional package that are required by AER)

The following variables are included in the dataset:

1. card: was the application for a card accepted? (Binary: 1/0) Response Variable

2. reports: Number of major derogatory reports

3. income: Yearly income (in USD 10,000)

4. Age: Age in years plus 12ths of a year

5. Owner: Does the individual own his/her home?

6. dependents: number of dependents

7. months: Months living at current address

8. share: ratio of monthly credit card expenditure to yearly income

9. selfemp: Is the individual self-employed?

10. majorcards: number of major credit cards held

11. active: number of active credit accounts

12. expenditure: average monthly credit card expenditure

Use variables 2 to 8 to determine which of the predictors influence the probability that an application is accepted. Online Quiz 3B will be based on your analysis below:

A.   Provide summary stat of the predictors.               (5 points)

B.    There are some values of variable age under one year. Consider data with age>18 for your analysis for the rest of the questions.      (5 points)

C.    Plot of income vs. reports (Number of major derogatory reports): mark individuals with card application accepted as blue, and not accepted as red.  (5 points)