Chapter 23 Bivariate Analysis: Measures of Association 264

Chapter 23

Bivariate Analysis: Measures of Association

True-False Questions

F 1. The following formula represents the calculation of the least-squares method of

551 regression analysis:

F 2. The above formula in question #1 represents the calculation of the coefficient of

555 determination.

T 3. The above formula in question #1 represents the calculation of the correlation

551 coefficient.

T 4. The type of measurement scale used will influence the choice of an appropriate
551 measure of association.

T 5. The Pearson product-moment correlation coefficient assumes that both variables are
551 measured on an interval- or ratio-scale.

F 6. A chi-square test between a measure of price consciousness and a measure of brand

550 awareness will provide information concerning the strength of the relationship.

T 7. The correlation coefficient is a statistical measure of the covariation between two

553 variables.

F 8. The correlation between variable X and variable Y is seldom identical to the

551 correlation between variable Y and variable X.

T 9. Simple correlation analysis is the most popular technique in business to indicate the
551 relationship between two variables.
Chapter 23 Bivariate Analysis: Measures of Association 265

T 10. The coefficient of determination measures that part of the total variance of variable Y
555 that is accounted for by knowing the value of variable X.

T 11. It is always possible to calculate the values on the main diagonal in a correlation matrix
555 without using any statistical formula.

T 12. A t-test may be performed using correlation coefficients.

556

T 13. Linear regression may be used to measure the association between two variables.
556

F 14. The major characteristic of the least squares line is that it passes through all the data
557 points in a scatter diagram.

F 15. When variables are not causally related, they cannot be statistically related.
555

F 16. As a general rule, statisticians assume that a high degree of correlation implies
553 causation.

T 17. As a general rule, statisticians do not assume that a high degree of correlation implies
553 causation.

T 18. To draw a regression line on a scatter diagram, you need to plot only two predicted
561 values of Y.

T 19. A researcher wishes to predict the sales for a retail store. If a least squares line cannot
562 be determined, the best sales prediction would be average sales of all retail stores.

T 20. Sales forecasts are a common use of regression analysis in business.

550

T 21. The unexplained variation in linear regression is the same as the residual.
563

T 22. The coefficient of determination reflects the proportion of variation in the dependent
555 variable explained by the independent variable.
Chapter 23 Bivariate Analysis: Measures of Association 266

Multiple Choice Questions

C 1. The following formula represents the calculation for:
551

A. the beta coefficient.

B. the coefficient of determination.
C. the correlation coefficient.
D. the sample means of X and Y.

B 2. If the number of babies born is used to predict the unit sales of baby carriages, the
550 number of babies born is the _____ variable and the unit sales of baby carriages is the
_____ variable.
A. dependent; independent
B. independent; dependent
C. spurious; independent
D. dependent; spurious

D 3. Which of the following values of the correlation coefficient would indicate a STRONG
553 INVERSE RELATIONSHIP between variables?
A. + .25
B. +.05
C. 0
D. -.92

C 4. A correlation coefficient of zero would indicate that:

551 A. a math error has occurred.
B. there is a perfect positive linear relationship between variables.
C. the variables are independent.
D. another sample should be drawn.

B 5. If the simple correlation coefficient were multiplied by itself, the result would be
555 called:
A. nonsense.
B. the coefficient of determination.
C. the coefficient of correlation.
D. a spurious correlation.
Chapter 23 Bivariate Analysis: Measures of Association 267

C 6. The main diagonal in a correlation matrix will consist exclusively of correlations equal
555 to:
A. zero.
B. positive values between zero and 1.00.
C. 1.00.
D. positive values greater than 1.00.

C 7. The least squares method generates a line that:

559 A. connects all points in a scatter diagram.
B. minimizes each of the deviations between actual values and predicted values.
C. minimizes the sum of the squared deviations between actual values and
predicted values for the dependent variable.
D. minimizes the sum of the squared predicted values.

C 8. The correlation coefficient, r, ranges from _____ to _____.

551 A. zero; +1.0
B. zero; -1.0
C. -1.0; +1.0
D. -.50; +.50

D 9. In the formula , a represents:

560 A. the independent variable.
B. the dependent variable.
C. the slope coefficient.
D. the Y-intercept.

D 10. In the following formula, and represent:

551

A. the beta coefficient.

B. the coefficients of determination.
C. the correlation coefficients.
D. the sample means of X and Y.

C 11. If the correlation between new housing starts and lumber sales is +.60, then ____
555 percent of the variance in lumber sales can be predicted from new housing starts.
A. 60
B. 40
C. 36
Chapter 23 Bivariate Analysis: Measures of Association 268

D. cannot be determined from the information given

A 12. In the formula , X represents:
560 A. the independent variable.
B. the dependent variable.
C. the slope coefficient.
D. the Y-intercept.

B 13. In the formula , Y represents:

560 A. the independent variable.
B. the predicted value of the dependent variable.
C. the slope coefficient.
D. the Y-intercept.

C 14. In the formula , represents:

560 A. the independent variable.
B. the dependent variable.
C. the slope coefficient.
D. the Y-intercept.

B 15. If the regression equation is equal to 23.6 - 54.2X, then 23.6 is the _____ while -54.2 is
560 the _____ of the regression line.
A. residual; slope
B. Y-intercept; slope
C. slope; Y-intercept
D. slope; residual

C 16. In the bivariate linear regression, the test for significance is the:
563 A. two-group t-test.
B. chi-square test.
C. F-test.
D. none of the above.

A 17. A chi-square test between a measure of price consciousness and a measure of brand
550 awareness will:
A. show if the variables are related.
B. show the strength of the relationship.
C. be meaningless.
D. none of the above.
Chapter 23 Bivariate Analysis: Measures of Association 269

Fill in the Blank

1. The __ _____ is a statistical measure of the association between two variables.

551
correlation coefficient

2. The formula for calculating the correlation coefficient for two variables, X and Y, is:
551

3. The symbol for calculating the coefficient of determination is: ___ .

555
r squared

4. The correlation coefficient ranges from to .

551
+1.0, -1.0

5. If the value of r equals , there is a perfect linear relationship.

551
+1.0 or –1.0

6. If we find that the value of r equals -.6, we know we have a(n) relationship.
553
inverse

7. It is important to remember that correlation does not mean .

553
causation

8. The is the standard form of reporting correlational results.

556
correlation matrix

9. Although regression and correlation are mathematically related, regression assumes the
556 dependent variable, Y, is linked to the independent or predictor variable, X.

predictively
Chapter 23 Bivariate Analysis: Measures of Association 270

10. Statistical values designed to represent covariation between variables are __ of

553 ______.

measures; association

11. If we wish to investigate a straight-line relationship of the type , we would

556 use _____ ______ regression.

bivariate linear

12. A(n) is the point at which a regression line intersects the Y-axis.
556
intercept

13. A(n) ___ is the “inclination” of a regression line.

556
slope

14. The ___ method is a mathematical technique ensuring that the regression line will
557 best represent the linear relationship between X and Y.

least-squares

15. A(n) ___ summary table is a table that presents the results of a regression
563 calculation.

analysis of variance (ANOVA)

16. The difference between the actual value of the dependent variable and the estimated
561 value of the dependent variable in the regression equation is called the .

residual

17. Using bivariate linear regression, we can investigate the relationship between
556 variables that are scaled.

two, interval-

18. In the regression equation, the estimated intercept of the y-axis represents the ___ of
560 the regression line.

Y-intercept
Chapter 23 Bivariate Analysis: Measures of Association 271

19. In the regression equation, the symbol beta ( ) is referred to as the coefficient.
560
slope

20. The slope data is the change in Y due to a corresponding change in __ .

556
X

21. A correlation coefficient indicates both the _____ of the linear relationship and the
551 _____ of the relationship.

magnitude; direction

22. The least-squares method mathematically determines the regression line for the
557 observed data.

best fitting

23. The regression line determined by the least-squares method may be used to forecast
556 values of the variable given a value for the variable.

dependent, independent

24. The most popular technique for indicating the relationship of one variable to another is
551 simple ___ analysis.

correlation

25. Covariance is _____ if the values of X and Y have a tendency to deviate in opposite
553 directions.

negative