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Chapter 18

Chapter 18. Measures of Association. Learning Objectives. Understand . . . How correlation analysis may be applied to study relationships between two or more variables The uses, requirements, and interpretation of the product moment correlation coefficient.

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Chapter 18

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  1. Chapter 18 Measures of Association

  2. Learning Objectives Understand . . . • How correlation analysis may be applied to study relationships between two or more variables • The uses, requirements, and interpretation of the product moment correlation coefficient. • How predictions are made with regression analysis using the method of least squares to minimize errors in drawing a line of best fit.

  3. Learning Objectives Understand . . . • How to test regression models for linearity and whether the equation is effective in fitting the data. • Nonparametric measures of association and the alternatives they offer when key assumptions and requirements for parametric techniques cannot be met.

  4. PulsePoint: Research Revelation 40 The minimum average annual percentage profit increase created by a 5% customer loyalty increase.

  5. Connections and Disconnections “To truly understand consumers’ motives and actions, you must determine relationships between what they think and feel and what they actually do.” David Singleton, vp of insights Zyman Marketing Group

  6. Measures of Association: Interval/Ratio

  7. Measures of Association: Ordinal

  8. Measures of Association: Nominal

  9. Researchers Search for Insights Burke, one of the world’s leading research companies, claims researchers add the most value to a project when they look beyond the raw numbers to the shades of gray…what the data mean.

  10. Pearson’s Product Moment Correlation r Is there a relationship between X and Y? What is the magnitude of the relationship? What is the direction of the relationship?

  11. Scatterplots of Relationships

  12. Scatterplots

  13. Diagram of Common Variance

  14. Interpretation of Correlations X causes Y Y causes X X and Y are activated by one or more other variables X and Y influence each other reciprocally

  15. Artifact Correlations

  16. Interpretation of Coefficients A coefficient is not remarkable simply because it is statistically significant! It must be practically meaningful.

  17. Comparison of Bivariate Linear Correlation and Regression

  18. Examples of Different Slopes

  19. Concept Application

  20. Plot of Wine Price by Average Temperature

  21. Distribution of Y for Observation of X

  22. Wine Price Study Example

  23. Least Squares Line: Wine Price Study

  24. Plot of Standardized Residuals

  25. Prediction and Confidence Bands

  26. Testing Goodness of Fit Y is completely unrelated to X and no systematic pattern is evident There are constant values of Y for every value of X The data are related but represented by a nonlinear function

  27. Components of Variation

  28. F Ratio in Regression

  29. Coefficient of Determination: r2 Total proportion of variance in Y explained by X Desired r2: 80% or more

  30. Chi-Square Based Measures

  31. Proportional Reduction of Error Measures

  32. Statistical Alternatives for Ordinal Measures

  33. Calculation of Concordant (P), Discordant (Q), Tied (Tx,Ty), and Total Paired Observations: KeyDesign Example

  34. KDL Data for Spearman’s Rho

  35. Artifact correlations Bivariate correlation analysis Bivariate normal distribution Chi-square-based measures Contingency coefficient C Cramer’s V Phi Coefficient of determination (r2) Concordant Correlation matrix Discordant Error term Goodness of fit lambda Key Terms

  36. Linearity Method of least squares Ordinal measures Gamma Somers’s d Spearman’s rho tau b tau c Pearson correlation coefficient Prediction and confidence bands Proportional reduction in error (PRE) Regression analysis Regression coefficients Key Terms (cont.)

  37. Intercept Slope Residual Scatterplot Simple prediction tau Key Terms (cont.)

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