But sellers supply more of a commodity when its price

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Unformatted text preview: e are directly related or positively co-related. Thus, correlation indicates the relationship between two such variables in which changes in the value of one variable is accompanies with a change in the value of other variable. Sikkim Manipal University Page No. 201 Research Methodology Unit 11 According to L.R. Connor, “if two or more quantities vary in sympathy so that movements in the one tend to be accompanied by corresponding movements in the other(s) they are said to be correlated”. W.I. King defined “Correlation means that between two series or groups of data, there exists some casual connection”. The definitions make it clear that the term correlation refers to the study of relationship between two or more variables. Correlation is a statistical device, which studies the relationship between two variables. If two variables are said to be correlated, change in the value of one variable result in a corresponding change in the value of other variable. Heights and weights of a group of people, age of husbands and wives etc., are examples of bi-variant data that change together. Correlation and Causation Although, the term correlation is used in the sense of mutual dependence of two or more variable, it is not always necessary that they have cause and effect relation. Even a high degree of correlation between two variables does not necessarily indicate a cause and effect relationship between them. Correlation between two variables can be due to following reasons:(a) Cause and effect relationship: Heat and temperature are cause and effect variable. Heat is the cause of temperature. Higher the heat, higher will be the temperature. (b) Both the correlated variables are being affected by a third variable. For instance, price of rice and price of sugar are affected by rainfall. Here there may not be any cause and effect relation between price of rice and price of sugar. (c) Related variable may be mutually affecting each other so that none of them is either a cause or an effect. Demand may be the r...
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