Big Rock Insurance Company did a study of per capita income and volume of insurance sales in eight Midwest cities. The volume of sales in each city was ranked, with 1 being the largest volume. The per capita income was rounded to the nearest thousand dollars. Using a 0.01 level of significance, test the claim that there is a monotone relation (either way) between rank of sales volume and rank of per capita income. (a) Using a rank of 1 for the highest per capita income, make a table of ranks to be used for a Spearman rank correlation test. (c) Compute the sample test statistic. (Use 3 decimal places.) Reading 1 2 3 4 5 6 7 8 Rank of insurance sales volume 2 7 6 3 8 1 5 4 Per capita income in $1000 18 13 17 19 12 15 14 16
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.
Big Rock Insurance Company did a study of per capita income and volume of insurance sales in eight Midwest cities. The volume of sales in each city was ranked, with 1 being the largest volume. The per capita income was rounded to the nearest thousand dollars.
Using a 0.01 level of significance, test the claim that there is a monotone relation (either way) between rank of sales volume and rank of per capita income.
| Reading | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Rank of insurance sales volume | 2 | 7 | 6 | 3 | 8 | 1 | 5 | 4 |
| Per capita income in $1000 | 18 | 13 | 17 | 19 | 12 | 15 | 14 | 16 |
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
