The data set cities lists the populations (in thousands) of Canada’s largest cities over 1992 to 1996. There is a division between Ontario and the West (the so-called “have” regions) and other regions...

The data set cities lists the populations (in thousands) of Canada’s largest cities over 1992 to 1996. There is a division between Ontario and the West (the so-called “have” regions) and other regions of the country (the “have-not” regions) that show less rapid growth. To identify the “have” cities we can specify

Plot the 1996 population against the 1992 population, using different colors to distinguish the two categories of city, both using the raw data and taking logarithms of data values, thus:

Which of these plots is preferable? Explain. Now carry out the regressions

and examine diagnostic plots. Which of these seems preferable? Interpret the results.