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## Demo for a Plot of Engel curve in sample space
data(engel)
plot(foodexp ~ income, data = engel, cex= .5, col = "blue",
xlab = "Household Income", ylab = "Food Expenditure")
z <- rq(foodexp ~ income, tau= .50, data = engel)# "median line": L1 - regression
abline(z, col = "dark blue")
abline(lm(foodexp ~ income, data = engel), lty=2, col="red") #the dreaded ols line
taus <- c(.05,.1,.25,.75,.90,.95)
nt <- length(taus)
for( i in 1:length(taus)) {
abline(rq(foodexp~income, tau=taus[i], data = engel), col="gray")
}
legend("bottomright",
c("L1 (tau = .50)", "OLS", paste("tau= ", formatC(rev(taus)))),
col = c("dark blue", "red", rep("gray", nt)),
lty = c(1,2, rep(1, nt)),
inset = 0.03)
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