Question

1. You have a theory that environmental degradation and a country’s GDP should be negatively correlated. To test your theory of environmental degradation and GDP, you calculate the correlation coefficient and find that r = 0.
   
2. 1. How is this r value different from your prediction?
   2. What might explain this discrepancy? (hint: think of what type of relationship r is able to describe)
   3. If you measured GDP in 1000s of dollars instead of 100s of dollars, would it help you to get the answer you expected? Why or why not?

Answer 1

Answer a

For the theory of environmental degradation and a country’s GDP should be negatively correlated to be correct, the value of 'r' should be negative.

Whereas, it is calculated to be 0 which signifies that the data suggest the two variables to be independent.

Answer b

The correlation coefficient between 2 sets of data from 2 variables, signify type of association between the 2 variables based on the given data.

The discrepancy may be due to lack of the proper variables or proper transformations of the variables. Another reason that might lead to the discrepancy spurious correlation.

Answer c

If I measured GDP in 1000s of dollars instead of 100s of dollars, it would not change the value of the correlation coefficient as change in location or scale of the variables does not affect the value of the