The Emerald datafile provides the Consumer Price Index (CPI) for all urban consumers, the medical component of the CPI, and the claim costs of the Emerald health care plan for the years 1986 to 1992. The Emerald health care providers claim that the cost of their plan has risen more slowly than overall costs. Line plots of the three variables illustrate their patterns of increase.
Simple regression is one way to evaluate Emerald's claim. Regressing the variable 'Emerald costs' on year, for example, the simple regression coefficient can be interpreted as the average annual increase in the cost of the Emerald plan over the seven-year period. Similar estimates can be produced for the two CPI's. Results of these regressions show that while Emerald costs have risen faster than the CPI for all urban consumers during this period, they have risen more slowly than the CPI for medical costs.