{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Lab 3 Scatter Diagrams, Covariance, Correlation and Regression

Lab 3 Scatter Diagrams, Covariance, Correlation and Regression

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Lab 3: The Sampling Distribution, Interval Estimation, Correlation and Covariance Objectives: 1. Still more practice with Excel: equations and functions. 2. Bivariate distributions – relationship between two variables. 3. Introduce the concepts of covariance and correlation – variables that are related to each other. 4. Descriptive measures of covariance and correlation. Key Terms: 1. Scatter Diagrams / X-Y Graphs. 2. Covariance and correlation . Data : Your Excel file from Lab 2, which continues our use of the Excel file: AmherstHomeSales2006 .xlsx . And an additional data set on home prices in Belchertown and Amherst. Exercises: Two-Sample Hypothesis Test of Means 1. The question we ask is: ‘Are the population mean house prices the same in Amherst and Belchertown?’ Thus, our hypothesis can be stated: H 0 : μ A = μ B ; H A : μ A μ B . 2. If the sample means for both Amherst and Belchertown homes are normally distributed (CLT here), then the difference is also normal, and we an apply the Z-test, or t-test if we don’t know the true standard deviations. 3. We presume no knowledge of the true population standard deviations. Thus, our safest choice for test statistics is a formulation that assumes unequal variances: ( ) ( ) 1 2 1 2 2 2 1 2 1 2 calc X X t s s n n μ μ = + , the degrees of freedom calculation for this statistic is a bit involved and will fall somewhere between the sample sizes for the two samples. Luckily, as we’ll see, Excel takes care of this for us. 4. We could easily calculate that in Excel, but if we go to Data and Data Analysis , we’ll find t-test: Two-Sample Assuming Unequal Variances . Click OK. The next window asks for the data range for each of the “two variables.” Here, we’ll treat the Amherst prices and Belchertown prices as different variables. Whoa! What do we need to do first before trying this test?? 5. Right, once you’ve done that, highlight the Amherst prices for Variable 1 and the Belchertown prices for Variable 2. What is the Hypothesized Mean Difference ? You also get to choose α . Then select the Output Range : a cell with lots of space below and to the right. Now click OK and
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern