BUSINESS MATHEMATICS FATHMATH SHAHINA MA-17

DEFINITION RANKING VARIABLES INTERPRETING RANK CORRELATION EXAMPLE

The study of relationships between different rankings on the same set of items. A rank correlation coefficient measures the correspondence between two rankings.

Ordinal variables are coded by categories, but they can be ranked, such as from highest to lowest, best to worst, or first to last. Example--Social class ranking with 4 categories: upper, middle, working and poverty

 1.00 means that the rankings are in perfect

agreement

-1.00 is if they are in perfect disagreement

0 signifies that there is no relationship

Let us test whether there is a relationship between GNP per capita and educational provision.

GNP per capita

Nepal Sudan Gambia 210 290 340

% adult literacy
39.7 55.5 34.5

Peru
Turkey Brazil Argentina

2460
3160 4570 8970

89
81.4 84 97

Israel
U.A.E. Netherlands

15940
18220 24760

96
74.3 100

FIRSTLY, all it needs is to enter the ranking, in this case from Highest to lowest
GNP per capita Nepal Sudan Gambia Peru Turkey Brazil Argenti na Israel U.A.E. Netherl ands 210 290 340 2460 3160 4570 8970 15940 18220 24760 RANK X 10 9 8 7 6 5 4 3 2 1 % adult literacy 39.7 55.5 34.5 89 81.4 84 97 96 74.3 100 RANK Y 9 8 10 4 6 5 2 3 7 1 D 1 1 -2 3 0 0 2 0 -5 0 D^2 1 1 4 9 0 0 4 0 25 0

N= 10

d^2=44

Formula

n n 1
2

6 d

D= DIFFERENCE BETWEEN THE RANKS N= NUMBER OF ITEMS

d^2=44 N= 10

10 102 1

6 44

= 0.73