myz-vgb.ru A Business Encyclopedia

Methods of Determining Correlation

Definition: The Correlation is a statistical tool used to measure the relationship between two or more variables, i.e. the degree to which the variables are associated with each other, such that the change in one is accompanied by the change in another.

The correlation is said to be linear when the change in the amount of one variable tends to bear a constant ratio to the amount of change in another variable. Whereas, the non-linear or curvilinear correlation is when the ratio of the amount of change in one variable to the amount of change in another variable is not constant.

methods of determining correlation-2 final

These figures clearly show the difference between the linear and non-linear correlation. To determine the linearity and non-linearity among the variables and the extent to which these are correlated, following are the important methods used to ascertain these:

methods of determining correlation

  1. Scatter Diagram Method
  2. Karl Pearson’s Coefficient of Correlation
  3. Spearman’s Rank Correlation Coefficient; and
  4. Methods of Least Squares

Among these, the first method, i.e. scatter diagram method is based on the study of graphs while the rest is mathematical methods that use formulae to calculate the degree of correlation between the variables.  The researcher may apply either of these methods on the basis of the nature of variables being considered in ascertaining the association between them.

Leave a Reply

Your email address will not be published. Required fields are marked *

Shares

Related pages


example of total utility and marginal utilityexpectancy theory of motivation vroomnumber of firms in monopolistic competitioncharacteristics of duopoly marketcost ascertainmentexample of quota sampling methodrationale meaning in telugustratification statistics definitiondefine captivesbehavioral market segmentation definitiondefine ethnocentric approachdeontology meaningdefine barometrickarl pearson's coefficient of correlationmarket challenger strategieswhat is greenshoetheory of egoismadvergaming definitiontransactional analysis in communication pptweber's theory of bureaucracyspeculative buying meaningherzberg's theorydefinition of rationing in economicsdifference between primal and dual problemsamenticfeatures of monopolistic competition in economicsformat of cash budgetwhistle blowing policy definitionmeaning of stability in hindispeculation economics definitionmaslows need hierarchythe delphi methodpost office monthly income scheme for senior citizenslaw of diminishing marginal utility exampledisinvestment definitiondefine fashion forecastingmeaning of multifacetednet national product at factor costorganisational theoriesmeaning of distribution channeldefinition of balanced fundhenry fayol 14 principles of managementequity share capital and preference share capitalabout nps schemedefine a bureaucratic organizationwhat are convertible debenturesvictor vroom motivationsegmented pricing definitiondefine elastic demandwhat is the meaning of loafingdescription of sole proprietorshiptypes of speculatorsdefinition of disguisediron laws of wagesmcclelland needs theorymnc definitionbrand sponsorship definitionmotives of inventory managementexplain the term infrastructuresimplex accountingconflict defcapital budgeting decision criteriasuper ego definitionwho is an autocratic leaderdemand forecasting managerial economicscultural ethnocentrism definitionfielder contingency modelprogram evaluation review technique perthenri fayol administrative managementmiller modiglianiwhere total utility is at a maximum marginal utility isthe meaning of arbitragemeaning of chronically