Stata Lecture 5 Flashcards
Define correlation
Association between two variables
Extent to which values in one variable influence the values in another variable
Two ways by which correlation can be represented/observed/summarised
Scatter Plots
Correlation Coefficients
What does a correlation coefficient tell you?
Quantifies the strength of association between two variables
When is Pearson Correlation Coefficient used?
Quantifies the strength of association between two quantitative variables that have a linear correlation
How are the results of the Pearson Correlation coefficient interpreted?
Possible values range from -1 to 1
r=1 means perfect positive correlation
r-0 means no correlation
r=-1 means perfect negative correlation
When is Spearmans correlation coefficient used?
Quantifies the strength of association between two quantitative variables that do not have a linear correlation, but are monotonic
Define monotonic
Either never positive or never negative
What is an R squared value?
aka coefficient of determination
Proportion of variation in one variable that can be explained/predicted by another variable
How is R square calculated?
(Pearson correlation coefficient) Squared
How to interpret the R squared value?
Takes values between 0 and 1
If 0 then no variation is explained
If 1 then all variation is explained
What is linear regression used for?
Creates a mathematical equation that describes a linear relationship between two variables, in the form y=mx+c
The equation can be used to predict the value of one variable using the other
What are the 2 assumptions of linear regression?
The outcome is quantitative
The relationship is linear
What is homoscedasticity
Constant variance of the residuals
What are residuals?
(Observed value for Y) - (Predicted value for y using x)
What are the two correlation coefficients?
Pearson’s correlation coefficient
Spearman’s rank correlation coefficient
