this phenomenon occurs often to most economic variables. To illustrate the point example, consider the number of cellular phone subscribers (x) from 1989 to 199 US, together with the total gross revenue (y) of the top 100 US law firms over the We call this correlation as spurio period. Cell phone subscribers (in thousands) Year Top U.S. law firms gross revenue (in million dollar 1989 3 508.9 12 400 5 283.1 7 557.1 1990 13 500 1991 13 900 1992 11 032.8 14 300 1993 16 009.5 14 600 24 134.4 15 300 1994 16 200 33 785.7 1995 18 000 44 000.0 1996 LESSON 6.

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Find: A. r (coefficient value) B. the type of relationship the variables have C. Create a scatterplot Show the solutions.
example, consider the number of cellular phone subscribers (x) from 1989 to 199
US, together with the total gross revenue (y) of the top 100 US law firms over the
this phenomenon occurs often to most economic variables. To illustrate the point
sa). We call this correlation as spurio
period.
Cell phone subscribers
Year
Top U.S. law firms gross
revenue (in million dolları
(in thousands)
1989
3 508.9
12 400
1990
5 283.1
13 500
1991
7 557.1
13 900
1992
11 032.8
14 300
1993
16 009.5
14 600
15 300
1994
24 134.4
16 200
1995
33 785.7
18 000
44 000.0
1996
LESSON 6.
Transcribed Image Text:example, consider the number of cellular phone subscribers (x) from 1989 to 199 US, together with the total gross revenue (y) of the top 100 US law firms over the this phenomenon occurs often to most economic variables. To illustrate the point sa). We call this correlation as spurio period. Cell phone subscribers Year Top U.S. law firms gross revenue (in million dolları (in thousands) 1989 3 508.9 12 400 1990 5 283.1 13 500 1991 7 557.1 13 900 1992 11 032.8 14 300 1993 16 009.5 14 600 15 300 1994 24 134.4 16 200 1995 33 785.7 18 000 44 000.0 1996 LESSON 6.
the other hand, it p0.t does not imply that the twa variables have
dence: It only implies that the variables have no linear dependence Figure 651 gives four atferent
1the two vartatles have no functional
narios for the correlation between two continuous varlables
Strong Positive Correlation
Strong Negative Correlation
30
10
20
S-10
10
-20
-30
4 6 8 10
2 4 6 8
10
No Dependence
and Correlation
Quadratic Dependence
and No Correlation
20
2
3 20
40
-2
-60
-4
10
2 4 6 8 10
4
8
FIGURE 6.5-1
EA
Transcribed Image Text:the other hand, it p0.t does not imply that the twa variables have dence: It only implies that the variables have no linear dependence Figure 651 gives four atferent 1the two vartatles have no functional narios for the correlation between two continuous varlables Strong Positive Correlation Strong Negative Correlation 30 10 20 S-10 10 -20 -30 4 6 8 10 2 4 6 8 10 No Dependence and Correlation Quadratic Dependence and No Correlation 20 2 3 20 40 -2 -60 -4 10 2 4 6 8 10 4 8 FIGURE 6.5-1 EA
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