Question 7: In a study of the relation between the expanding budget of advertisement on a specific product (X) in thousands of pounds and the quantity sold (Y), in tons, of a product. A sample of the advertising budget and the quantity sold in eight successive months is drawn from one of the companies which are dealing in such a product and the following information is obtained. ΣΧ-130 , ΣΧ.- 1850 i=1 i=1 EY; =110 Σ1650 i=1 i=1 The value of the Y-intercept (a) = 9.395 Using the previous information calculate 1) The correlation coefficient (r) and the determinant coefficient ( R²). Comment on the results. 2) Find the regression line of Y on X and interpret the meaning of its intercept and regression coefficient. 3) Predict the number of tones sold from this product if the expended advertising budget in one month is 25 thousand pounds
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.
In a study of the relation between the expanding budget of an advertisement on a specific product (X) in thousands of pounds and the quantity sold (Y), in tons, of a product. A sample of the advertising budget and the quantity sold in eight successive months is drawn from one of the companies which are dealing in such a product and the following information is obtained.
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