The data analysis to be conducted in this paper will mainly involve using data from the yearly government finance in Palestine for 2010-2013. The data set contains the revenues and expenses of the Palestinian government. It also contains data on transactions in nonfinancial assets, net acquisition of financial assets and net incurrence of financial liability. The aim or conducting the data analysis is study the relationship between the revenue received by the government and the expenses it undergoes. The variables selected for the analysis are taxes and compensation of employees. The main hypothesis of the study is that an increase in taxes should lead to an increase in compensation. Therefore, the data analysis carried out in the paper will aim at determining the relationship between the taxes that the government collects and the compensation received by employees. A scatter plot will also be developed using SPSS for the variables to view any trends in the data.
Regression Analysis
Using SPSS a regression analysis was carried out between taxes and the compensation received by employees. The independent variable is the amount of taxes collected by the government while the dependent variable is the compensation received by employees. As stated earlier, it is expected that the taxes collected will have a direct effect on employee compensation. Government revenue and expenditure are important measures in any country as they help in determining the economic position of a country. This indicators help data analysts determine the effectiveness of any financial policies that a government may have. Therefore, data analysis is important to explain the correlation between the revenue received by the government and its expenses.
Compensation of employees = 0.25 (Taxes) + 1086.507.
This model shows that the relationship between taxes and compensation of employees is positive. This implies that as the amount of taxes increase so does the compensation of employees in the country.
The F value equal to 0.711 is also near one, implying that the hypothesis that an increase in taxes should lead to an increase in compensation is true.
The tables below show the SPSS output of the regression analysis carried out.
Scatter Plot:
Using SPSS a scatter plot was developed in order to graphically examine the relationship and trend between two variables selected for analysis. The table below shows the raw data used to develop the scatter plot. From the table and the scatter plot, it is clear that both taxes and compensation of employees have both been increasing between 2010 and 2013. This observation supports the conclusion drawn from the regression model that the two variables have a positive relationship. This implies that in Palestine as the taxes collected increase so does the compensation of employees and vice versa. However, from the scatter plot there is one outlier point between 2011 and 2012 that does not reflect the relationship discussed above. This is mainly because in 2012 the taxes increased but the compensation of employees decreased.
Graph
Chart 1: Scatter plot of compensation of employees vs. taxes
