CORRELATION ANALYSIS
(1) Tests on "rho". Hypothesis tests. Examples problems 1 and 2 on set 1. Two more examples of tests: using small set of data from the QCA housing market : asking price of houses and (i.) size of home and (ii) age of home.
(2) "p values" and tests on rho. (Look at the correlation matrix on SAS outputs)
P value is defined as the lowest level of significance could use in a given example and still reject the null. This is, to say the least, a little confusing. It's like saying you get an 84% on the first quiz and that therefore the cutoff for an A would have to be as low as an 84% for you to get an A for the quiz. Basically, if p-value <alpha then you will reject the null. If the p-value is greater than alpha then no.
(3) Key assumption behind hypothesis tests on rho: both x and y ~ N: the Shapiro-Wilk test.
(Review discussion of central limit theorem in our text (check index of text for pages). Also click here , here, or just google central limit theorem applets.)
Click here or here to see how we use SAS or JMP to generate Shapiro-Wilk stat and its p-value. For an online version of Shapiro Wilk click here.
Introduction to regression:
When we reject the null in tests of significance on rho this indicates that there is a significant linear (line-like) relationship.
What sort of information does a straight line equation yield? (1) slope, (2) y intercept and (3) predictions of y based on x. All this really in response to question raised last Friday in class; does correlation tells us HOW MUCH of a change in the y will follow a given change in x?
Technique of OLS (ordinary least squares) or for short, just LS (least squares).
STATS TUTORING:
Stats I or II
Kevin Zaker
Sundays 5:00-7:00p.m. Olin 109
Tuesdays & Thursdays 3:00-5:00p.m. Evald 305
Jessica DuPerow
Tuesdays & Thursdays 1:00-3:00p.m. Evald 305
SAS LABS
Kevin Zaker
Sundays 5:00-7:00p.m. Olin 109
Tuesdays & Thursdays 3:00-5:00p.m . Evald 305
Justin Sell
Tuesdays & Wednesdays 5:00-7:00p.m. Olin 109