A consulting company is hired to investigate the relationship between average physician annual income and number of beds present at a local hospital. Assume the following table represents a SRS of hospitals. Average Physician Annual Income($/year, X) Number of Beds (Count, Y) 127,655 698 176,526 943 134,253 713 114,534 578
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
A consulting company is hired to investigate the relationship between average physician annual income and number of beds present at a local hospital. Assume the following table represents a SRS of hospitals.
Average Physician Annual Income($/year, X)
Number of Beds (Count, Y)
127,655
698
176,526
943
134,253
713
114,534
578
A) Calculate basic
B) Calculate a
C) Calculate and correctly interpret your r2 for the data.
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