Statistics: Informed Decisions Using Data (4th Edition)

Published by Pearson
ISBN 10: 0321757270
ISBN 13: 978-0-32175-727-2

Chapter 4 - Section 4.1 - Assess Your Understanding - Explaining the Concepts - Page 206: 51

Answer

Section 1: Correlation coefficient. Pearson correlation coefficient quantifies how strong two variables share a linear relationship. There can be two kinds of correlation coefficients, namely, population and sample correlation coefficient. The population correlation coefficient is denoted by p and the sample is denoted by r. The formula for sample correlation coefficient is \[r=\frac{n\,(\sum{xy)-}(\sum{x)(\sum{y)}}}{\sqrt{[n\sum{{{x}^{2}}-}(\sum{x{{)}^{2}}}][n\sum{{{y}^{2}}-}(\sum{y{{)}^{2}}}]}}\] Where \[\overset{\lower0.5em\hbox{$\smash{\scriptscriptstyle\leftharpoonup}$}}{x}\]is the sample mean for variable x. \[\overset{\lower0.5em\hbox{$\smash{\scriptscriptstyle\leftharpoonup}$}}{y}\]is the sample mean for variable y. n is the total number of people. Section 2: If the value of \[({{x}_{i}}-\overset{\lower0.5em\hbox{$\smash{\scriptscriptstyle\leftharpoonup}$}}{x})\]and \[({{y}_{i}}-\overset{\lower0.5em\hbox{$\smash{\scriptscriptstyle\leftharpoonup}$}}{y})\]are positive, so will be their product. This will indicate that the two variables have a positive linear correlation. If the product is negative, then they will share a negative linear correlation.

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