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Calculate Karl Pearson

Karl Pearson's coefficient of correlation was calculated from advertisement cost and sales data of 10 companies. The advertisement costs and sales figures were arranged and the mean and deviations from the mean were calculated. The product of the deviations was found to be 2,704. Using this, the coefficient of correlation was calculated to be 0.7804, indicating a strong positive correlation between advertisement cost and sales.

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2K views2 pages

Calculate Karl Pearson

Karl Pearson's coefficient of correlation was calculated from advertisement cost and sales data of 10 companies. The advertisement costs and sales figures were arranged and the mean and deviations from the mean were calculated. The product of the deviations was found to be 2,704. Using this, the coefficient of correlation was calculated to be 0.7804, indicating a strong positive correlation between advertisement cost and sales.

Uploaded by

jaitripathi26
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Question: Calculate Karl Pearson's coefficient of correlation from the

advertisement cost and sales as per the data given below: 

Advertisement Cost (in’000$) 39 65 62 90 82 75 25 98 36 78


Sales (in lakh$) 47 53 58 86 62 68 60 91 51 84
                                                                           
Solution:  Calculation of Coefficient of Correlation

Advt. Cost Dev. From Square of  Sales (in  Dev. From  Square of Product of
(‘000 $ ) Mean (65) Dev. Lakh $) Mean (65) Dev. Deviation
X    x          
            Xy
   X2    Y     Y    Y2

39 —26 676 47 —19 361 +494


65 +0 0 53 —13 169 0
62 —3 9 58 —8 64 +24
90 +25 625 86 +20 400 +500
82 +17 289 62 —4 16 — 68
75 +10 100 68 +2 4 + 20
25 —40 1600 60 —6 36 +240
98 +33 1089 91 +25 625 +825
36 —29 841 51 —15 225 +435
78 +13 169 84 +18 324 +234
∑X = ∑x = ∑ x2 = ∑Y= ∑ y2 = 2,224 ∑xy =
650 0 5,398 660 0 +2.704
n=10 n=10

 Mean of series (X ) = (∑X)/n = 650/10 = 65

 Mean of series (Y) = (∑Y)/n=660/10 = 66

 r = (∑xy)/(√(n&(∑x2)/n)× √((∑y2)/n)) = (+ 2704)/(√(10&5398/10)× √(2224/10))

= (+ 2704)/(10×23.233×14.913)= (+ 2704)/3464.737 = 0.7804

Problem: The weekly salaries of six employees at McDonalds are Rs.140, Rs.220,
Rs.90, Rs.180, Rs.140, and Rs.200.  For these six salaries, find:
(a) the mean (b) the median (c) the mode

Solution: List the data in order: 90, 140, 140, 180, 200, 220
                                                                               
Mean:    90+ 140+ 140+ 180 + 200 + 220 = 
                                        6                             

Median:    90,140,140,180,200,220
The two numbers that fall in the middle need to be averaged.     140 + 180 = 160
                           2 

Mode:   The number that appears the most is 140

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