Partial and Multiple Correlation

Q.N. 1 Write a note on Partial Correlation. List out its relative merits and demerits.
Partial correlation is also called net correlation and to some extent, it is the reverse of multiple
correlation. It seeks to measure the relationship between one dependent variable and one particular
independent variable acting separately, keeping the effect of all other independent variables
theoretically eliminated or removed. In other words, it aims at measuring the degree of association
between dependent variable and a single independent variable in a universe unaffected by variations in
other specified independent variables.
A partial correlation coefficient seeks to answer the question, what is the relationship
between, say Y and X1 keeping other Xis constant? It is denoted by r12.345.n and read as partial
correlation coefficient between X1 and X2 keeping the effect of X3, X4,and Xn constant. For
simplicity, if we suppose that there are only three variables: X 1, X2 and X3, then the three partial
correlation coefficients are defined in terms of simple correlation coefficients and are given by:
r12.3= partial correlation coefficient between X1 and X2 keeping the effect of X3 constant
r12 r13 .r23

1 r13 2 1 r23 2
,
r23.1= partial correlation coefficient between X2 and X3 keeping the effect of X1 constant =
r23 r12 .r13

1 r12 2 1 r13 2
, and
r13.2 = partial correlation coefficient between X1 and X3 keeping the effect of X2 constant =
r13 r12 .r23

1 r12 2 1 r23 2
,
Where,
r12=simple correlation coefficient between X1 and X2,
r23= simple correlation coefficient between X2 and X3,
r13=simple correlation coefficient between X1 and X3,

1 r12.3 , r23.1 , r13.2 1

The values of partial correlation coefficients lie between -1 and +1 .i.e.
Further, partial correlation coefficients are always interpreted through the coefficient of partial
determination which shows the proportion of unexplained variance in the one variable that is
explained by the additional influence of the variable not being held constant. For example:
r212.3= Extra variation in X1 explained by the additional influence of X2
Variation in X1 unexplained by X3 alone
Merits of Partial Correlation:
In reality any phenomenon is affected by a multiplicity of factors. For example, production of
wheat is affected by amount of fertilizer, amount of rainfall, quality of seeds, temperature etc.
With the help of partial correlation, we can determine the degree of relationship between one
dependent variable and one particular independent variable keeping the influence of other
variables constant.
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 It is especially useful in the analysis of interrelated series. It is pertinent to uncontrolled
experiments of various kinds in which such relationship usually exists. Most economic data
fall in this category.
Demerits
The zero order correlation must have linear regression.
The effects of the independent variables must be additively and not jointly related.
It has laborious calculations and difficult interpretations even for the statisticians.
Its reliability decreases as the order (number of variables kept constant) increases.
Q.N. 2 Write a note on multiple correlation. List out its relative merits and demerits
Multiple correlation is an extension of partial correlation. It is a measure of relationship
between dependent variable and one another variable that is a combination of all other independent
variables. It measures the degree to which variations in dependent variable are related to the combined
effect of all other independent variables. Thus, multiple correlation coefficient measures the degree of
association between dependent variable and one another variable that includes the combined effect of
all other independent variables. The multiple correlation coefficient is denoted by R 1.23.n which
measures the degree of relationship between the variable X 1 and a combination of all other
independent variables X2, X3,., Xn. In case of three variables only: X 1, X2, and X3, the three
multiple correlation coefficients are given by:
R1.23= multiple correlation coefficient between X1 and a combination of X2 and X3
r12 2 r132 2.r12.r13 .r23

1 r23 2

R2.31= multiple correlation coefficient between X2 and a combination of X3 and X1

r232 r12 2 2.r12.r13 .r23

1 r13 2

R3.12= multiple correlation coefficient between X3 and a combination of X1 and X2

r13 2 r232 2.r12.r13 .r23

1 r12 2

Where,
r12=simple correlation coefficient between X1 and X2,
r23= simple correlation coefficient between X2 and X3,
r13=simple correlation coefficient between X1 and X3,
The values of multiple correlation coefficients always lie between zero and one i.e.
0 R1.23 , R2.31 , R3.12 1

Further, the values of multiple correlation coefficients are always interpreted through the coefficients
of multiple determination which show the proportion of explained variation in dependent variable that
is explained by the joint effect of all independent variables.

Merits of Multiple Correlation:

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It helps us to find the degree of association between dependent variable another group of
variables as independent variables. Many economic phenomena are affected by a multiplicity
of factors. So, multiple correlation helps to determine the combined or joint effect of all cause
variables on dependent variable.

It serves as a measure of goodness of fit of regression plane/line.

Demerits

It is based on linear relationship. So, linear regressions coefficients are not accurately
descriptive of curvilinear data.

There exists a possibility of misinterpretation.

Limitations of the assumption that the effects of independent variables on the dependent
variables are separate distinct and additive.

Q.N. 3 Distinguish between Partial and Multiple Correlation.

Correlation means simply the nature and degree of relationship among variables. When we measure
the degree of relationship between two variables only, it is called simple correlation and when we
probe into the analysis of relationship among more than two variables, we are led to multiple and
partial correlations.
Partial Correlation
Partial correlation is the study of relationship between one dependent variable (say X 1) and one
independent variable (say X2) while the influence of all other independent variables (X 3, X4, Xn) are
theoretically held constant. It is denoted by
r12.345n
For example, when we study the relationship between wheat yield (X 1) and rainfall (X2) while
keeping the influence of fertilizer (X3), quality of seed (X4) etc. constant. It is partial correlation.
Multiple Correlation
Multiple correlation is the study of relationship between one dependent variable (say X 1) and one
another variable which is a combination of all other independent variables. So, in multiple correlation,
we study the relationship between one dependent variable and all other independent variables taken
simultaneously. It is denoted by R1.234n
For example, if we study the relationship between wheat yield (X1) and another variable which in
the combination of fertilizer (X3), rainfall (X2), quality of seed (X4) etc., it is multiple correlation.
The main difference between partial correlation and multiple correlation can be summarized in
the following table:
Partial Correlation Multiple Correlation
1. Partial correlation is the study of degree 1. Multiple correlation is the study of degree of
of relationship between one dependent relationship between one dependent variable and one
variable and one independent variable, another variable which is the combination of all
keeping the influence of all other other independent variables.
independent variables constant.

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2. The purpose of partial correlation is to 2. The purpose of multiple correlation is to
show the relative importance of the different determine the efficiency with which two or more
individual variables on dependent variable. variables will predict performance in a particular
setting.
3. In partial correlation, some variables 3. In multiple correlation, no variables are held
are held constant. constant.
4. The partial correlation coefficients are of 4. Since no variables are kept constant, multiple
zero order, first order, second order, etc as correlation coefficients are always of zero order.
per the number of variables kept constant.
5. In case of three variables x1, x2 and x3, 5. In case of three variables x1, x2 and x3, the three
the three partial correlation coefficients are: multiple correlation coefficients are:
r12.3 = Partial correlation coefficient between R1.23 = Multiple correlation coefficient between x1
x1 and x2 keeping the influence of x3 and a combination of x2 and x3
r12 r13r23 r122 r132 2r12.r23.r31

1 r132 1 r232 1 r232
constant
Where, Where,
r12 = Simple correlation coefficient between r12 = Simple correlation coefficient between x1 and x2
x1 and x2 r23 = Simple correlation coefficient between x2 and x3
r23 = Simple correlation coefficient between r31 = Simple correlation coefficient between x3 and x1
x2 and x3
Similarly,
r31 = Simple correlation coefficient between
x3 and x1 R2.31= Multiple correlation coefficient between x2 and
Similarly, r232 r122 2r12.r23.r31
2
r23.1= Partial correlation coefficient between 1 r31
x2 and x3 keeping influence of x1 constant a combination of x1 and x3
r23 r12r13 R3.12 = Multiple correlation coefficient between x3

2
1 r12 1 r13 2 and a combination of x1 and x2
r132 r232 2r12.r23.r31

and 1 r122
r13.2 = Partial correlation coefficient between
x1 and x3 keeping influence of x2 constant
r13 r12r23

1 r122 1 r232

6. The value of partial correlation 6. The value of multiple correlation coefficients lie
coefficients lie between +1 and 1, i.e. between 0 and 1, i.e.
1 r12.3 1 0 R 1.23 1

1 r23.1 1 0 R 2.31 1

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1 r31.2 1 0 R 3.12 1

7. The partial correlation coefficients are 7. The multiple correlation coefficients are
interpreted through the coefficient of partial interpreted through the coefficient of multiple
determination calculated by squaring the determination calculated by squaring the multiple
partial correlation coefficients. correlation coefficients.
8. The reliability of the partial correlation 8. The reliability of the multiple correlation
1 r212.3 1 R 21.23
r ;etc R ;etc
1.23
N M 1.23
N M
coefficients is given by coefficients is given by
where, M is the number variables and N is
where, M is the number variables and N is the
the number of observations.
number of observations.
THE END