Chapter 5. Nonlinearity
In this chapter, we will cover the following recipes:
- Generalized additive models - measuring the household income of New Zealand
- Smoothing splines - understanding cars and speed
- Local regression - understanding drought warnings and impact
Generalized additive models - measuring the household income of New Zealand
An income survey provides a snapshot of income levels for people and households. It gives median and average weekly income from most sources. There are income comparisons across different population groups. Income is only received intermittently, whereas consumption is smoothed over time. As a consequence, it is reasonable to expect that consumption is more directly related to current living standards than current ...