Content of exercises for the course Statistics in Economics and Management

IV week
Regression and correlation analysis
Linear regression
Example 1:
Based on the given data of the production volume and costs in one company for 6 year period:
year
1
2
3
4
5
6
a)
b)
c)
d)

Production volume
(000 pieces)
4
6
8
10
12
13

Production costs
(000 KM)
100
146
178
220
256
280

Draw a scatter diagram.

Calculate and explain coefficient of correlation and coefficient of determination.
Determine the functional form of the regression and explain parameters.
If the production volume is 15.000 units, what is the expected level of production costs?

Example 2:
The data on the value of two phenomena, the costs of advertising - x and sales volume - y, collected at
10 different shopping malls, are given in following table:
The costs of
advertising - x
18
7
14
31
21
5
11
16
26
29

Volume of
sales - y
55
17
36
85
62
18
33
41
63
87

a) Draw a scatter diagram.

b) Determine the functional form and strength of the relationship between the advertising costs
and the volume of sales.
c) For the costs of advertising of 30 $, how much of the sales volume is expected?
d) Determine the strength of the correlation by using Spearmans rank correlation coefficient.

Example 3:
The data on monthly loan payment and amount of monthly savings in 6 households are given in the
following table:
Monthly loan
Monthly savings
payment (00 KM)
(00 KM)
5
1,5
4,8
2
2,5
3
3,8
2,4
4
2,2
1,2
3,8
a) Draw a scatter diagram.
b) Determine and explain the parameters of the corresponding regression model.
c) Calculate and explain the coefficients of correlation and determination.
Example 4:
The data of qualification rank and working efficiency rank for 6 employees are given in the table
below:
worker
B
E
D
A
F
C
Qualification
1
2
3
4
5
6
rank
Efficiency
25
30
23
21
18
20
rank
On the basis of Spearmans rank correlation coefficient, assess the strength and direction of
relationship between qualifications and efficiency of workers.

Example 5:
The results of examination of the average monthly sales and psychophysical ability (obtained by
psychophysical performance test) of sellers are given in the following table:
monthly sales
test results
(in 1000 $)
10
55
11
62
29
80
12
62
20
70
13
62
24
75
18
80
15
65
a) Determine and explain the strength of correlation between these phenomena, by using
correlation coefficient.
b) On the basis of Spearmans rank correlation coefficient, assess the strength and direction of
relationship between these phenomena.