Question

1. You find a correlation between age and income of .875 Does this indicate that age is a causative factor in income?

2. If you were to find a linear correlation of .679 between education and income, how much of a change in income is explained by the change in education?

Answer 1

(1)

You find a correlation between age and income of .875. This does not indicate that age is a causative factor in income.

Explanation: Correlation does not imply causation. Correlation between age and income of 0.875 tells us that the two variables: age and income are strongly directly linearly related and change together. It does not tell us why and how behind the relationship but it just says a strong direct linear relationship exists between age and income.

(2)

Coefficient of Determination = R² = 0.679² = 0.4601 = 46.01 %.

So,

If you were to find a linear correlation of .679 between education and income, 46.01 % of a change in income is explained by the change in education.