a-1. Compute the following correlation matrix. (Round your answers to 4 decimal places.) Correlation Matrix Amount of Tip ($) Amount of Bill ($) Diners Amount of Tip ($) Amount of Bill ($) Diners
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
![The Conch Café, located in Gulf Shores, Alabama, features casual lunches with a great view of the Gulf of Mexico. To accommodate
the increase in business during the summer vacation season, Fuzzy Conch, the owner, hires a large number of servers as seasonal
help. When he interviews a prospective server, he would like to provide data on the amount a server can earn in tips. He belleves that
the amount of the bill and the number of diners are both related to the amount of the tip. He gathered the following sample
information.
Amount of
Amount of
Bill
$ 48.97
Number of
Amount of
Amount of
Number of
Diners
Customer
Tip
$7.00
Diners
Customer
Tip
$ 3.30
Bill
$ 23.59
1.
16
4.50
28.23
10.65
19.82
4.
3.50
3.25
17
22.30
32.00
1.00
2.40
5.00
3
1
18
3
19
5.40
50.02
4
5
28.62
2.25
5.50
3.00
20
17.60
6.
4.25
24.83
21
44.47
4
0.50
6.24
22
20.27
19.53
8
6.00
49.20
23
1.25
3.25
6.
5.00
43.26
24
27.03
10
4.75
31.36
25
3.00
21.28
11
5.25
32.87
26
6.25
43.38
12
13
6.00
4.00
34.99
33.91
27
5.60
2.50
9.25
8.25
28.12
4
28
26.25
14
3.35
23.06
29
56.81
15
0.75
4.65
30
50.65
O Click here for the Excel Data File
a-1. Compute the following correlation matrix. (Round your answers to 4 decimal places.)
Correlation Matrix
Amount of Tip ($)
Amount of Bill ($)
Diners
Amount of Tip ($)
Amount of Bill ($)
Diners
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c. Compute and report the regression equation that predicts "amount of bill" with "number of diners." (Negative amounts should be
indicated by a minus sign. Round "amount of bill" to 3 decimal places and "number of diners" to 4 decimal places.)
Amount of Bill
(number of diners)
d-1. Report the regression equation that predicts "amount of tip" with "amount of bill." (Negative amounts should be indicated by a
minus sign. Round your answers to 4 decimal places.)
(amount of bill).
Amount of tip
d-2. Report the coefficient of determination. (Round your answer to 2 decimal places.)
Coefficient of determination](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1d1c5be9-aea8-4329-a082-163277ee4f1f%2F3cfc3bd2-9ab0-4039-9ba2-b0cb133ca402%2F9yv3oj_processed.jpeg&w=3840&q=75)
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a-1.
The correlation values is obtained using EXCEL. The software procedure is given below:
- Enter the data.
- Select Data > Data Analysis >Correlation> OK.
- Enter Input Range as A1:C31 for variables Amount of tip, Amount of bill and Number of dinners.
- Mark Labels in First Row.
- Click OK.
The output using EXCEL is as follows:
From the output, the correlation matrix is,
Amount of Tip | Amount of Bill | Dinners | |
Amount of tip | 1 | - | - |
Amount of Bill | 0.9151 | 1 | - |
Dinners | 0.8726 | 0.8506 | 1 |
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