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Correlation and Regression Analysis Steps

i) The steps in hypothesis testing are the same for correlation analysis and regression analysis: define the null and alternative hypotheses, choose a significance level, calculate the test statistic, and determine whether to reject or fail to reject the null hypothesis based on the critical region. ii) For correlation analysis, the test statistic is the correlation coefficient r. For regression analysis, the test statistic is b, the slope of the regression line estimated by least squares. iii) The decision is to reject the null hypothesis if the test statistic falls in the critical region, indicating a linear association between the variables for correlation analysis or that y can be written as a linear function of x for regression analysis.

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61 views2 pages

Correlation and Regression Analysis Steps

i) The steps in hypothesis testing are the same for correlation analysis and regression analysis: define the null and alternative hypotheses, choose a significance level, calculate the test statistic, and determine whether to reject or fail to reject the null hypothesis based on the critical region. ii) For correlation analysis, the test statistic is the correlation coefficient r. For regression analysis, the test statistic is b, the slope of the regression line estimated by least squares. iii) The decision is to reject the null hypothesis if the test statistic falls in the critical region, indicating a linear association between the variables for correlation analysis or that y can be written as a linear function of x for regression analysis.

Uploaded by

Karen Yap
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Correlation Analysis Regression Analysis

Steps in Hypothesis
Testing
i) Null ⍴ xy =0 β=0
Hypoth
esis
ii) Alterna ⍴ xy < 0 β≠0
tive ⍴ xy > 0
Hypoth ⍴ xy ≠ 0
esis
iii) Signific
ance
level
(α)
iv) Test Estimate the correlation coefficient
Estimate β by b
Statisti n n n

c
r=
i =1
( )( )
∑ x i y i− ∑ x i ∑ y i
i =1 i=1
/n
n
∑ x i y i−
i=1
n

( )(∑ )
∑ xi
i =1
n

i =1
yi / n
b=

√(
n n 2 n n 2 n n 2

∑
i=1
x 2i −
(∑ ) )(∑ (∑ ) )
i=1
xi /n
i =1
y 2i −
i=1
yi / n ∑
i=1
(∑ )
x2i −
i=1
xi / n

n b−β
6 ∑ d2i t c=
i=1 s /s xx
r s =1− 2
n( n −1) Where:

n
r n−2
t c= √ 2 ∑ ( y − y )2
√ 1−r s= i=1
n−2
n
s xx =∑ ( x i −x )2
i =1
v) Critical H o if |t c|>t (α , n-2)
Reject Reject
H o if |t c|>t (α , n-2)
Region
vi)
Reject
H o is true, there is no linear association Reject
H o is true, y cannot be
Decisio
between x and y variables written as a linear function of x
n

Lesson 5. Correlation and Regression Analysis

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