Premium Essay

Sons

In: Business and Management

Submitted By Odidi
Words 949
Pages 4
CHAPTER 10 : Correlation and Regression

10-1 : OVERVIEW

• We consider sample data that comes in matched pairs. We are making inferences about the relationship between two variables.

10-2 : CORRELATION

DEFINITION:

Correlation – exists between two variables when the values of one of them are somehow associated with the values of the other.
Linear Correlation – exists between two variables when there is a correlation and the plotted points of paired data result in a pattern that can be approximated by a straight line.
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DEFINITION:

Linear correlation coefficient r : measures the strength of the linear relationship between the paired x and y – quantitative data in a sample. Its value is computed using formula 10-1.

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Example : Using the sample data below, find the value of the linear coefficient r.

| |x |y |x•y |x2 |y2 |
| |3 |5 | | | |
| |1 |8 | | | |
| |3 |6 | | | |
| |5 |4 | | | |
|Total | | | | | |

• Using table A-6: If the absolute value of r exceeds the value in table A-6, conclude that there is a linear correlation. Otherwise conclude that there not sufficient evidence to support the

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