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Urban Communication
Table of Contents
Introduction ........................................................................2 Data and Methodology........................................................3 Regression...........................................................................4 Conclusion...........................................................................8 MatLab Commands .............................................................9 Bibliography ...................................................................... 10

Table of Figures
Fig. 1: collected data (world bank data) .................................................................................... 3 Fig. 2: internet use and GDP ...................................................................................................... 4 Fig. 3: cell phone use and GDP................................................................................................... 4 Fig. 4: urban population and GDP .............................................................................................. 4 Fig. 5: individual line fitting (with prediction bands) ................................................................. 5 Fig. 6: regression analysis .......................................................................................................... 6

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Introduction
In the past two decades, and especially since the beginning of the 21st century, new technological visual, oral and written communication methods have become the norm, facilitating communities to exchange information on a global level. The internet, as the virtual part of urbanism, had a huge impact on assisting communication on a vast variety of levels, such as education, health care and business. It is also reducing the transportation requirement of information, and has a relatively instant speed of delivery. With the growth of internet availability and integration with governments, marketing opportunities increased, as well as job opportunities. [1] Secondly, cell phone communication also has a vast impact on the economy and well being of a country, especially in remote areas, where the substitute would have been physical transport. [2] Finally, it could also be argued that the increase in the urban population, here looked at as the increase in physical communication due to proximity, has the potential of reducing communication burdens, and therefore progress faster towards a wealthier nation. All of these influence the economy and standards of living, as well as education and many others. This paper examines the implications of different variables related to virtual and physical communication tools on the overall living standard, by running a multiple linear regression and analyzing it. For this particular analysis the program Matlab is used, which is a high-level technical computing language and interactive environment for algorithm development, data visualization, data analysis, and numeric computation program. [3] For the regression I will explore the relationships between the urban population percentages (X1), the internet users per hundred users(X2) and cell phones subscriptions (X3) in a random set of 23 countries, and regress them to the most used indicator for wealth of a nation and standard of living, the GDP (Gross domestic product) (Y). The data sets used in the regression are for the countries: Ethiopia, Kenya, India, Sudan, Iraq, Egypt, Indonesia, South Africa, Mexico, Turkey, Brazil, Israel, Spain, United Kingdom, Singapore, Canada, Germany, France, Australia, Sweden, United States, United Arab Emirates and Switzerland, and the source is from the Worldbank data. [4] The year for all the data is 2009.

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Data and Methodology

The following data sample has been collected from the Worldbank to perform the analysis:

Fig. 1: collected data (world bank data)

The urban population data refers to people living in urban areas as defined by national statistical offices. It is calculated using World Bank population estimates and urban ratios from the United Nations World Urbanization Prospects. The internet users data refers to the number of users per 100 p with access to the World Wide Web. Mobile cellular telephone subscriptions are subscriptions to a public mobile telephone service using cellular technology, which provide access to the public switched telephone network. Post-paid and prepaid subscriptions are included. At last, the GDP is calculated by the following equation: Spending (G) and Net Exports (X (exports)- M (imports)). Y=C+I+G+(XM), where GDP (Y) is a sum of Consumption (C), Investment (I), Government

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The first step will be making simple regressions, for each of the three explanatory variables (Xis), to the independent variable (Y), where the X represents the urban population, the internet users and the cell phone subscriptions, and the Y correspond to the GDP. The linear function is (Y = 0 + 1X1 +) where the 1 is the slope, with an error term. The next step will be running the hypothesis test (H0: i = 0) to exclude it from the 95% confidence interval. The third step would be a multiple linear regression. Each two dependent variables will be regressed to the independent variable. At the end, all dependant variables will be taken into one multiple regression. The R Square is giving us the percentage of the variability of Y explained by the Xis, simply put; it explains the behavior of Y. The P-value will provide us with a credibility coefficient to determine the significance of the findings. [5]

Regression
First, I plotted the three dependant variables separately to the dependant variable:

Fig. 4: urban population and GDP

Fig. 2: internet use and GDP

Fig. 3: cell phone use and GDP

From the graphs we can tell that the relationship switches direction in the three Xis. This means that we cannot say that the larger the internet users or cell users or urban population the higher the GDP is.

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Then, I used the OLS (ordinary least squares) to fit a line for each of the dependants. The dotted lines in the following graph represent the 95% confidence, which here are called the prediction bands.

Fig. 5: individual line fitting (with prediction bands)

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The following tables include the findings of the three single and four multiple linear regressions, with the GDP as the intercept, which will be analyzed afterwards:

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Fig. 6: regression analysis

When looking at the single regression 2 we can see that the internet use has an 87.1% in R2, which means that this amount of the variability of the dependent variable (GDP) is explained by the variability of the independent variable (Internet). The P value of the dependent variable (internet) is near (but not) zero. This shows a high level of confidence, and falsifies the null hypothesis. The function for the single regression is: Y = -3739 +590.9X2 + The effect of adding a second variable, like adding the urban population variable in the multiple regression 1 for example, shows a slight and insignificant increase in the R2 of only 0.4%. As the P value of the added variable (urban population) is 0.4, it shows us that it doesnt have a significant relationship with the independent variable (GDP). The last multiple regression takes the three dependent variables into the calculation. The addition of the cell phone users reduced the P value of the urban population variable, and raised the overall percentage of the explanation of the dependant Y to 88.04%. From all the regressions we can see that the more related (even if not significantly) variables added, the more coverage of the interpretation of the independent variable. This is only in the case that the null hypothesis is falsified. The function for the last multiple regression is: Y = -611.5 -124.86X1 + 608.47 X2 +48.89 X3+ The huge difference in beta zero shows us that it was estimated too low. The enormous fluctuation, even between positive and negative, of the urban population beta coefficient is another signal next to the p value that it is either irrelevant or the data set is not naturally distributed. The high p value 0.915 of the intercept shows that it is not reliable and random. Therefore, the rejection of the regression is reasonable and thus the use of the multiple regression with the cell and internet usage only would be more accurate. High GDP countries could exist with a medium urban population.

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Conclusion
The indicators for GDP cannot be looked at in isolation, and cannot be separated from broader demographic, economic and social influences, such as natural resources for example. In order to use this model, certain assumptions have to be met. Since the sample is not a natural distribution (from the central limit theorem), and not randomly selected, we can hold the test (with the three dependents) for untrue and from the plots we can see that its a homoscedastic behavior. This could be due to the fact that the selection of countries was bias, as I have chosen to use the countries of my co-students and other countries of interest. The standard deviation of the regression model shows us that there is about 30% of error. This means that this model is not good to be used for prediction for the GDP. This is calculated by dividing the error by the mean value of the GDP (independent). Even when GDP is widely used by economists, it has a lot of limitations. This can be seen in its ignorance of externalities, such as the damage of the environment, and also its lack of quality, for example in not showing the wealth distribution. However, I found no other indicator that would fit the calculation of wellbeing in this exercise. We have seen that the low density or rural or in other words the urban sprawl does not directly relate to the GDP of a country. Nevertheless, it is certain that the immense infrastructure and resource use to create and connect these unsustainable car driven suburbs has a direct negative relationship with the economy and also the environment, which will be multiplied when we run out of fossil fuels. [6] On the other hand, the relationship between the internet usage and GDP is significant, and proved to be consistent. It can be stated confidently, that the use of internet contributes through the spill out effect of knowledge to the increase of economic growth. At last, the variables internet and cell usage play a significant but not complete role in explaining the GDP, as there are many other variables that fill the inexplicable part of it.

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MatLab Commands
load('x1_urbanpop') load('x2_internetusers') load('x3_cellusers') load('y_gdp') y_gdp=y_gdp'; X_multiple1_internet_urban=vertcat(x2_internetusers,x1_urbanpop)'; X_multiple2_cell_urban=vertcat(x3_cellusers,x1_urbanpop)'; X_multiple3_internet_cell=vertcat(x2_internetusers,x3_cellusers)'; X_multiple4_urban_internet_cell=vertcat(x1_urbanpop,x2_internetusers,x3_cellusers)'; whichstats = {'beta', 'yhat', 'r', 'rsquare', 'tstat', 'fstat'}; stats = regstats(y_gdp, x1_urbanpop, 'linear', whichstats); (beta = stats.beta; yhat = stats.yhat; r = stats.r; rsquare = stats.rsquare; tstat = stats.tstat; fstat = stats.fstat; disp ' ' disp 'the Single Regression 1(with urbanpop):' disp ' ' disp 'the estimated coefficients ...' disp 'beta0 (for the Intercept), beta1 (for urbanpop)' tstat.beta disp 'Press any key to continue ...' pause disp ' ' disp 'the t-statistics ...' tstat.t disp 'Press any key to continue ...' pause disp ' ' disp 'p-values' tstat.pval disp 'Press any key to continue ...' pause disp ' ' disp 'R-squared:' rsquare disp ' ' pause) (note:from this point the commands between brackets would be referred to as *C1) stats = regstats(y_gdp, x2_internetusers, 'linear', whichstats); (*C1) stats = regstats(y_gdp, x3_cellusers, 'linear', whichstats); (*C1) stats = regstats(y_gdp, X_multiple1_internet_urban, 'linear', whichstats); (*C1) stats = regstats(y_gdp, X_multiple2_cell_urban, 'linear', whichstats); (*C1) stats = regstats(y_gdp, X_multiple3_internet_cell, 'linear', whichstats); (*C1) stats = regstats(y_gdp, X_multiple4_urban_internet_cell, 'linear', whichstats); (*C1) (end of script)

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Bibliography
[1] The Internet and its Effect on the Economy and Government. Martine Kalaw. people.hamilton.ed. [Online]. http://people.hamilton.edu/bhouse/EconAndGov/EconAndGov.html [2] The Impact of Telecoms on Economic Growth in Developing Countries. Meloria Meschi and Melvyn Fuss Leonard Waverman. web.si.umich.edu. [Online]. http://web.si.umich.edu/tprc/papers/2005/450/L%20Waverman%20Telecoms%20Growth%20in%20Dev.%20Countries.pdf [3] Matlab Product Description. mathworks.com. [Online]. http://www.mathworks.com/products/matlab/description1.html [4] data.worldbank.org. [Online]. http://data.worldbank.org/ [5] Introductory statistics for business and economics, 4th ed.Ronald J. Wonnacott Thomas H. Wonnacott,: John wiley and sons. [6] Urban Density and Climate Change. David Dodman. unfpa.org. [Online]. http://www.unfpa.org/webdav/site/global/users/schensul/public/CCPD/papers/Dodm an%20Paper.pdf

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