Estimating an expected living standard according to its initial level

The following figure shows a scatter plot of household expenditures in Benin for 1996 and 1999.

The expected living standard in 1999 (conditional on a 1996 value) can be estimated as follows:

  1. Use DAD and launch the application Distribution => Non parametric regression.
  2. Select the appropriate vectors (X: Income in the initial period, Y: Income in the final period)
  3. Click on the button RANGE and choose the appropriate range (optional)
  4. Click on the button GRAPH