The Pearson correlation coefficient of household income (X) and expenditure (Y) of a particular city is calculated to be 0.90. What does the value indicate?
The Pearson correlation coefficient measures the strength and direction of the linear relationship between two variables. In this case, a value of 0.90 indicates a strong positive linear relationship between household income (X) and expenditure (Y) in the particular city. This means that as the household income increases, the expenditure also increases, and vice versa.
The Pearson correlation coefficient is a measure of the linear relationship between two variables. In this case, a Pearson correlation coefficient of 0.90 indicates a strong positive linear relationship between household income (X) and expenditure (Y) in the particular city.
This means that as household income increases, expenditure tends to increase as well. Similarly, as household income decreases, expenditure tends to decrease. The value of 0.90 suggests that there is a strong tendency for the two variables to move in the same direction.