The following data is of the age of an item and the associated price of that item. Age (yr) 5 4 6 5 5 5 6 6 2 7 7 Price ($) 85 103 70 82 89 98 66 95 169 70 48 a) Calculate the Pearson Product moment correlation coefficient for this set of data. b) Determine the least square regression equation for this set of data taking price ($) as Regressand and Age as predictor. c) Interpret what does regression coefficient indicates in the above model.
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 following data is of the age of an item and the associated price of that item.
|
Age (yr) |
5 |
4 |
6 |
5 |
5 |
5 |
6 |
6 |
2 |
7 |
7 |
|
Price ($) |
85 |
103 |
70 |
82 |
89 |
98 |
66 |
95 |
169 |
70 |
48 |
- a) Calculate the Pearson Product moment
correlation coefficient for this set of data. - b) Determine the least square regression equation for this set of data taking price ($) as
Regressand and Age as predictor.
- c) Interpret what does regression coefficient indicates in the above model.
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