A study was conducted to determine if there was a relationship between the prices a non-member of a club paid for various publications and the prices that a member paid for the same publications. The data gathered is shown below. Table 7 Non-member Member Price Price 58 42 46 32 25 75 32 22 20 16 19 58 35 63 34 48
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.
i) Compute the
ii) What is the critical value at 5% significance level if the study wants to test the significance of the relationship between non-member price and member price?
iii) Compute the test statistic to test the significance of the relationship between non-member price and member price
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