\nIt is a statistical method or a statistical technique that measures quantitative relationship between different variables, like between price and demand.
\nAccording to Croxton and Cowden, \u201cWhen the relationship is of a quantitative nature, the appropriate statistical tool for discovering and measuring the relationship and expressing it in a brief formula is known as correlation.\u201d<\/p>\n
Types of Correlation<\/strong> Degree of Correlation<\/strong> Methods of Estimating Correlation<\/strong> Karl Pearson\u2019s Coefficient of Correlation<\/strong> Short-cut Method<\/strong> Step Deviation Method<\/strong> Spearman\u2019s Rank Correlation Coefficient<\/strong> Coefficient of Rank Correlation when Ranks are Equal formula Importance or Significance of Correlation<\/p>\n Statistics for Economics Class 11 Notes Chapter 7 Correlation Correlation It is a statistical method or a statistical technique that […]<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_yoast_wpseo_focuskw":"","_yoast_wpseo_title":"","_yoast_wpseo_metadesc":"\"Get Statistics for Economics Class 11 Notes Chapter 7 Correlation on Infinity Learn.\"","custom_permalink":"study-material\/class-11\/economics\/statistics-for-economics-class-11-notes-chapter-7-correlation\/"},"categories":[92,21],"tags":[],"table_tags":[],"acf":[],"yoast_head":"\n
\nCorrelation is commonly classified into negative and positive correlation.<\/p>\n\n
\nDegree of correlation refers to the coefficient of correlation
\n![\"Statistics](\"https:\/\/infinitylearn.com\/surge\/wp-content\/uploads\/2021\/12\/Statistics-for-Economics-Class-11-Notes-Chapter-7-Correlation-1.png\")
\n(ii) Absence of Correlation
\n(iii) Limited Degree of correlation
\nThe degree of correlation between 0 and 1 may be rated as<\/p>\n\n
\n(i) Scatter Diagram Scattered diagram offers a graphic expression of the direction and degree of correlation.
\n![\"Statistics](\"https:\/\/infinitylearn.com\/surge\/wp-content\/uploads\/2021\/12\/Statistics-for-Economics-Class-11-Notes-Chapter-7-Correlation-2.png\")
<\/p>\n
\nThis is also known as product moment correlation and simple correlation coefficient.
\nKarl Pearson has given a quantitative method of calculating correlation Karl Pearson\u2019s coefficient correlation is generally written as V.
\nFormula According to Karl Pearson\u2019s method, the coefficient of correlation is measured as
\n\\(r=\\frac{\\Sigma x y}{N \\sigma_{x} \\sigma_{y}}\\)
\nWhere,
\nr = Coefficient of correlation;
\nx = x \u2013 \\(\\overline{x}\\)
\ny= y \u2013 \\(\\overline{y}\\)
\n\u03c3x<\/sub> = Standard deviation of x series
\n\u03c3y<\/sub> = Standard deviation of y series
\nN= Number of observations
\nIf there is no need to calculate standard deviation of x and y directly using the following formula
\n\\(r=\\frac{\\Sigma x y}{\\sqrt{\\Sigma x^{2} \\times \\Sigma y^{2}}}\\)
\nHere, x(x \u2013 \\(\\overline{x}\\)), y = (y \u2013 \\(\\overline{y}\\))<\/p>\n
\nThis method is used when mean value is not in whole number but in fractions. In this method, deviation is calculated by taking the assumed mean both the series.
\nCoefficient of correlation is calculated using the following formula
\n![\"Statistics](\"https:\/\/infinitylearn.com\/surge\/wp-content\/uploads\/2021\/12\/Statistics-for-Economics-Class-11-Notes-Chapter-7-Correlation-3.png\")
\nHere, dx<\/sub> = deviation of x series from the assumed mean = (x \u2013 A)
\ndy<\/sub> = deviation of y series from the assumed mean = (y \u2013 A)
\n\u03a3 dxdy \u2013 sum of the multiple of dx and dy
\n\u03a3 dx2<\/sup> = sum of square of dx
\n\u03a3 dy2<\/sup> = sum of square of dy
\n\u03a3dx= sum of deviation of x-series
\n\u03a3dy = sum of deviation of y-series
\nN = Total number of items<\/p>\n
\nCoefficient of correlation is calculated using the following formula
\n![\"Statistics](\"https:\/\/infinitylearn.com\/surge\/wp-content\/uploads\/2021\/12\/Statistics-for-Economics-Class-11-Notes-Chapter-7-Correlation-4.png\")
<\/p>\n
\nIn 1904, \u2018Charles Edwards Spearman\u2019 developed a formula to calculate coefficient correlation of qualitative variables. It is popularly known as Spearman\u2019s rank. Difference formula or method.
\n![\"Statistics](\"https:\/\/infinitylearn.com\/surge\/wp-content\/uploads\/2021\/12\/Statistics-for-Economics-Class-11-Notes-Chapter-7-Correlation-5.png\")
<\/p>\n
\n![\"Statistics](\"https:\/\/infinitylearn.com\/surge\/wp-content\/uploads\/2021\/12\/Statistics-for-Economics-Class-11-Notes-Chapter-7-Correlation-6.png\")
\nHere, m = number of items of equal ranks.<\/p>\n\n