Application of Spearmen Correlation

Data Analysis and Presentation (BM - 4152)

Subject Lecturer: Ms. A.C. Jayathilake

Submission Data: 03/01/2020

Group No: 06
Year IV semester I
Department of Business Management
Sabaragamuwa University of Sri Lanka

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Acknowledgment
Successfully completion of any types of report requires helps from a numbers of

persons. We have taken help from different people for the preparation of this report.

Now, there is a little effort to show my deep gratitude to that helpful persons.

Firstly, we would like to express my deepest thanks to our Ms.A.C. Jayathilake for

her vital support, guidance and encouragement. Without her support this report would

have come forth.

At last but not the least we are thankful to all our collegues who have been always

helping and encouraging us throughout this report. we have no valuable words to

express our thanks, but our heart is still full of the favors received from every persons

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Abstract
This report indicates the application of Pearson Correlation on the product packaging

on consumers’ buying behavior with special reference of supermarket in Colombo

district and the Partial Correlation on factors influencing on foreign direct investment

inflows in Sri Lanka according to the Central Bank report. The researcher used

Minitab and SPSS analytical software to analyze data.

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Contents
Introduction.............................................................................................................................5
Simple Correlation (r)...........................................................................................................6
Partial correlation.................................................................................................................6
Pearson’s Correlation...............................................................................................................6
Methodology........................................................................................................................6
Conceptual Framework.........................................................................................................7
Independent Variables..........................................................................................................7
Objectives.............................................................................................................................8
Hypothesis............................................................................................................................8
Conclusion..........................................................................................................................12
Partial Correlation..................................................................................................................13
Methodology......................................................................................................................13
Conceptual Framework.......................................................................................................13
Objectives...........................................................................................................................13
Hypothesis..........................................................................................................................13
Conclusion..............................................................................................................................16
Appendix.................................................................................................................................17

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Introduction

The purpose of carrying out correlation coefficient (r) analysis is to explore the

associative relationship between independent and dependent variable[ CITATION

Sen18 \l 1033 ]. In fact, researcher cannot prove that one variable cause a changes in

another variable if there is no connection between two variable analyzed. The

correlation coefficient(r) vary from -1 to +1. If there is no correlation between two

variables, correlation coefficient denoted by the “0”. Furthermore, if the correlation

coefficient value indicates in between “0 and +1” it considers as positive association

as well as “r” value demonstrates in between “-1 to 0” considers as negative

association between two variables. It is categorized as linear (Person correlation) and

non-linear (Spearman and Kendall correlations).

Partial Correlation

“Partial correlation is the measure of association between two variables, while

controlling or adjusting the effect of one or more additional variables” Partial

Correlation useful for isolating the unique relationship between 2 variables when

other variables are ruled out [ CITATION Lev03 \l 1033 ]

Person Correlation

Person’s correlation coefficient is the statistic that measure the statistical relationship,

or association, between two variables and it uses two type of qualitative variables.

namely, discrete and continuous data.

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Spearman Correlation

The spearman correlation coefficient is the non-parametric version of the Pearson

correlation coefficient. It is applied only for qualitative data and both independent and

dependent variable should be ordinal.

Throughout this report, data was analyzed by only using spearman correlation

analysis.

Introduction to Data Set

This report consists with two type of data set to identify relationship between

particular variable. Firstly, researcher used primary data to analyze correlation by

using Spearman’s Rank Correlation.

Primary Data Analysis

Research Objectives

To identify whether there is a correlation between common preferences of people who

are living near to the university and undergraduate of the faculty of management

studies with regarding to the 7 networking sites.

Hypothesis

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Methodology
The population of this study was customer who purchased from supermarket in

Colombo district. Researcher considered 384 customers as the sample size to conduct

the study by using simple random sampling in order to generalize the finding in the

particular sector.

Researcher collected the data from survey by including six demographic questions

and 20 items. There were 4 items for color used in packaging, 4 items for material

used in packaging, 3 items for design of the wrapper, 4 items for innovation of the

packaging and in the dependent variable of purchasing intention of packaging had

included 5 items. The researcher used SPSS software to analyze the data

Conceptual Framework

Independent Variables Dependent Variable

Color using packaging

Material uses in
packaging Purchasing intention on
packaging

Design of the wrapper

Innovation of the
packaging

Independent Variables
 Color using packaging

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 Color plays an important role in a potential customer’s decision-making

process; certain colors set different moods and can help to draw attention

[ CITATION Ahm14 \l 1033 ].

 Material uses in packaging

Any material used specially to protect something- packing, wadding.

Consumer can change its decision regarding Packaging material. High quality

Packaging attract consumer then law quality Packaging. So packaging material

has strong impact on buying behavior [ CITATION Ahm14 \l 1033 ].

 Design of the wrapper

The overall design also plays a vital role in attracting the consumer. The

companies try their best to create attractive design of packaging [ CITATION

Ahm14 \l 1033 ].

 Innovation of the packaging

Innovative packaging may actually add value to the product if it meets a

consumer need such as portion control, recyclability, tamper-proofing, child-

proofing, easy-open, easy store, easy-carry, and non-breakability[ CITATION

Ahm14 \l 1033 ].

Dependent Variable

 Purchasing intention on packaging

Packaging is an important tool for promoting products and stimulating

purchase intention [ CITATION Kha18 \l 1033 ].

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Objectives
1. To find out whether there is an association between color used in packaging and

purchasing intention on packaging with special reference in supermarket in

Colombo district.

Hypothesis
1. Ho: There is no association between color used in packaging and purchasing

intention on packaging with special reference in supermarket in Colombo district.

H1: There is an association between color used in packaging and purchasing

intention on packaging with special reference in supermarket in Colombo district.

Table 1: Association between Purchasing intention of packaging and color used in

packaging

Dependent Variable Independent Variable

Colour used in packaging
Purchasing intention Correlation 0.350
of packaging Coefficient
P Value 0.000
Source: Secondary Data
As per the Table:1, the P value (0.000) is less than critical P value (0.05), there are

enough evidence to reject H0 (H0: There is no association between color used in

packaging and purchasing intention on packaging with special reference in

supermarket in Colombo district, H1: There is an association between color used in

packaging and purchasing intention on packaging with special reference in

supermarket in Colombo district). Therefore, it can be concluded 95% of confident

level, there is an association between color used in packaging and purchasing

intention of packaging. r value is 0.350, there is law degree of positive correlation

between purchasing intention of packaging and color used in packaging.

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2.To find out whether there is an association between material used in packaging and

purchasing intention on packaging with special reference in supermarket in Colombo district.

2. H0: There is no association between material used in packaging and purchasing

intention on packaging with special reference in supermarket in Colombo district.

H1: There is an association between material used in packaging and purchasing

intention on packaging with special reference in supermarket in Colombo district.

Table 2: Association between Purchasing Intention of Packaging and Material Used in

Packaging

Dependent Variable Independent Variable

Material used in packaging
Purchasing intention Correlation 0.488
of packaging Coefficient
P Value 0.000
Source: Secondary Data

According to the Table 2, the P value (0.000) is less than critical P value (0.05), there

are enough evidence to reject H0 (H0: There is no association between material used in

packaging and purchasing intention on packaging with special reference in

supermarket in Colombo district, H1: There is an association between material used in

packaging and purchasing intention on packaging with special reference in

supermarket in Colombo district). Therefore, it can be concluded with 95% of

confident level, there is an association between purchasing intention of packaging and

material used in packaging. And the r value is 0.488, there is law degree of positive

correlation between purchasing intention of packaging and material used in

packaging.

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3. To identify whether there is a positive association between design of the wrapper

and purchasing intention on packaging with special reference in supermarket in

Colombo district.

3. H0: There is no association between design of the wrapper and purchasing

intention on packaging with special reference in supermarket in Colombo district.

H1: There is a positive association between design of the wrapper and purchasing

intention on packaging with special reference in supermarket in Colombo district.

Table 3: Association between Purchasing Intention Packaging and Independent

Variable Design of the Wrapper

Dependent Variable Independent Variable

Design of the Wrapper
Purchasing intention of Correlation Coefficient 0.410
packaging
P Value 0.000
Source: secondary data

According to Table 3, the P value (0.000) is less than critical P value (0.05), there are

enough evidence to reject H0 (H0: There is no association between design of the

wrapper and purchasing intention on packaging with special reference in supermarket

in Colombo district, H1: There is a positive association between design of the wrapper

and purchasing intention on packaging with special reference in supermarket in

Colombo district).Therefore, it can be concluded with 95% of confident level, there is

an association between purchasing intention of packaging and material used in

packaging. And the r value is 0.410, there is law degree of positive correlation

between purchasing intention of packaging and design of the wrapper.

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4. To find out whether there is a positive association between innovation of the

packaging and purchasing intention on packaging with special reference in

supermarket in Colombo district.

4. H0: There is no association between innovation of the packaging and purchasing

intention on packaging with special reference in supermarket in Colombo district.

H1: There is a positive association between innovation of the packaging and

purchasing intention on packaging with special reference in supermarket in

Colombo district.

Table 4: The association between Purchasing Intention of Packaging and Innovation

of Packaging

Dependent Variable Independent Variable

Innovation of packaging
Purchasing intention of Correlation Coefficient -0.195
packaging
P Value 0.000
Source: Secondary data

According to Table 4, the P value (0.000) is less than critical P value (0.05), there are

enough evidence to reject H0 (H0: There is no association between innovation of the

packaging and purchasing intention on packaging with special reference in

supermarket in Colombo district, H1: There is a positive association between

innovation of the packaging and purchasing intention on packaging with special

reference in supermarket in Colombo district).Therefore, it can be concluded with

95% of confident level, there is an association between purchasing intention of

packaging and innovation of the packaging. And the r value is -0.195, there is law

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degree of negative correlation between purchasing intention of packaging and

innovation of the packaging.

Conclusion
Researcher studied, the association between four independent variables and one

dependent variable. Among those variables, two non-directional hypotheses and two

directional hypotheses were conducted by the researcher. According to the analyzed

data, color used in packaging and material used in packaging (independent variables)

had association bet ween purchasing intention of packaging (dependent variable) and

there is a law degree of positive correlation. The association between design of the

wrapper and purchasing intention of packaging had law degree of positive correlation

and innovation of packaging and purchasing intention of packaging had law degree of

negative correlation.

Partial Correlation

Methodology
The study had been selected for the period of last five years from 1977 to 2017 past

details of foreign direct investment and micro economics factors in Sri

Lanka[ CITATION Cen17 \l 1033 ]. The population was 41 years data values. The

researcher used SPSS software to analyze the secondary data

Conceptual Framework
Independent Variables Dependent Variable

Exchange Rate

Trade Openness
Foreign Direct Investment

Inflation

GDP
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Objectives
1. To find out whether there is association between foreign direct investment a gross

domestic product(GDP) by keeping constant inflation.

Hypothesis
1. H0: There is no association between foreign direct investment and gross domestic

product by keeping constant of inflation.

H1: there is association between foreign direct investment and gross domestic

product by keeping constant of inflation.

Table 5: The association between gross domestic product and foreign direct

investment while keeping constant of inflation

Dependent Variable Independent Variable

Gross Domestic Product
Foreign Direct Investment Correlation Coefficient 0.226

P Value 0.161
Source: The Annual Report of the Central Bank of Sri Lanka

According to Table 5, the P value (0.161) is greater than critical P value (0.05), there

are not enough evidence to reject H0 (H0: There is no association between foreign

direct investment and gross domestic product by keeping constant of inflation, H 1:

there is association between foreign direct investment and gross domestic product by

keeping constant of inflation)

Therefore, it can be concluded with 95% of confident level, there is an association

between gross domestic product and foreign direct investment by keeping constant of

inflation. And the r value is 0.226, there is law degree of positive correlation between

gross domestic product and foreign direct investment.

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2. To find out whether there is association between foreign direct investment and

trade openness by keeping constant exchange rate

2. H0: There is no association between foreign direct investment and trade openness

by keeping constant exchange rate

H1: There is an association between foreign direct investment and trade openness

by keeping constant exchange rate.

Table 6: The association between foreign direct investment and trade openness

by keeping constant exchange rate

Dependent Variable Independent Variable

Trade Openness
Foreign Direct Investment Correlation Coefficient -0.413

P Value 0.008

Source: The Annual Report of the Central Bank of Sri Lanka

According to Table 6, the P value (0.008) is less than critical P value (0.05), there are

enough evidence to reject H0 (H0: There is no association between foreign direct

investment and trade openness by keeping constant of exchange rate, H1: there is

association between foreign direct investment and trade openness by keeping constant

of exchange rate)

Therefore, it can be concluded with 95% of confident level, there is an association

between trade openness and foreign direct investment by keeping constant exchange

rate. And the r value is - 0.413, there is law degree of negative correlation between

trade openness and foreign direct investment.

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 3. To find out whether there is association between foreign direct investment and

exchange rate by controlling the effect of inflation

3. H0: There is no association between foreign direct investment and exchange

rate by controlling the effect of inflation

H1: There is association between foreign direct investment and exchange rate

by controlling the effect of inflation

Dependent Variable Independent Variable

Exchange Rate
Foreign Direct Investment Correlation Coefficient 0.862

P Value 0.000
Table 7: the association between foreign direct investment and exchange rate by

controlling the effect of inflation

Source: The Annual Report of the Central Bank of Sri Lanka

According to Table 7, the P value (0.000) is less than critical P value (0.05), there

are enough evidence to reject H0 (H0: There is no association between foreign

direct investment and exchange rate by controlling the effect of inflation, H1:

there is association between foreign direct investment and exchange rate by

controlling the effect of inflation).

Therefore, it can be concluded with 95% of confident level, there is an

association between foreign direct investment and exchange rate by controlling

the effect of inflation. And the r value is 0.862, there is high degree of positive

correlation between trade openness and foreign direct investment.

Conclusion
Researcher examined to identify association between four independent variables and

dependent variable. There is a law degree of positive correlation between foreign

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direct investment and gross domestic product by controlling the effect of inflation.

The association between foreign direct investment and trade openness by keeping

control exchange rate had law degree of negative correlation. And also, the

association between foreign direct investment and exchange rate by controlling the

effect of inflation had high degree of positive correlation.

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Appendix
Appendix A Association between dependent variable and independent variables

Correlations

CUIP MUIP DOW IOP PIP

Pearson Correlation 1 .313** .140** -.070 .350**

CUIP Sig. (2-tailed) .000 .006 .172 .000

N 384 384 384 384 384

** ** *
Pearson Correlation .313 1 .297 -.120 .488**
MUIP Sig. (2-tailed) .000 .000 .019 .000
N 384 384 384 384 384
** ** **
Pearson Correlation .140 .297 1 -.191 .410**
DOW Sig. (2-tailed) .006 .000 .000 .000
N 384 384 384 384 384
* **
Pearson Correlation -.070 -.120 -.191 1 -.195**
IOP Sig. (2-tailed) .172 .019 .000 .000
N 384 384 384 386 384
** ** ** **
Pearson Correlation .350 .488 .410 -.195 1

PIP Sig. (2-tailed) .000 .000 .000 .000

N 384 384 384 384 384

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

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 Correlations

Control Variables FDI GDPrate Inflationrate

Correlation 1.000 .213 -.275

FDI Significance (2-tailed) . .181 .082

df 0 39 39

Correlation .213 1.000 .015

-none-a GDPrate Significance (2-tailed) .181 . .925

df 39 0 39

Correlation -.275 .015 1.000

Inflationrate Significance (2-tailed) .082 .925 .

df 39 39 0
Correlation 1.000 .226

FDI Significance (2-tailed) . .161

df 0 38
Inflationrate
Correlation .226 1.000

GDPrate Significance (2-tailed) .161 .

df 38 0

a. Cells contain zero-order (Pearson) correlations.

Appendix B Association between GDP and FDI by keeping constant of inflation

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Appendix C Association between exchange rate and FDI by keeping the effect of
inflation rate

Control Variables FDI Exchangerate Inflationrate

Correlation 1.000 .872 -.275

FDI Significance (2-tailed) . .000 .082

df 0 39 39

Correlation .872 1.000 -.359

-none-a Exchangerate Significance (2-tailed) .000 . .021

df 39 0 39

Correlation -.275 -.359 1.000

Inflationrate Significance (2-tailed) .082 .021 .

df 39 39 0
Correlation 1.000 .862

FDI Significance (2-tailed) . .000

df 0 38
Inflationrate
Correlation .862 1.000

Exchangerate Significance (2-tailed) .000 .

df 38 0

a. Cells contain zero-order (Pearson) correlations.

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Appendix D Association between FDI and Trade Openness by keeping constant of
Exchange rate

Correlations

Control Variables FDI Tradeopnnessra Exchangerate

te

Correlation 1.000 -.618 .872

FDI Significance (2-tailed) . .000 .000

-
n df 0 39 39

o Correlation -.618 1.000 -.509

nTradeopnnessrate Significance (2-tailed) .000 . .001

e df 39 0 39
- Correlation .872 -.509 1.000
a
Exchangerate Significance (2-tailed) .000 .001 .

df 39 39 0
E Correlation 1.000 -.413
xFDI Significance (2-tailed) . .008
c df 0 38
h
Correlation -.413 1.000
a
Significance (2-tailed) .008 .
n
38 0
g
eTradeopnnessrate
r
df
a
t
e

a. Cells contain zero-order (Pearson) correlations.

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