Question

Coffee is a leading export from several developing countries. When coffee prices are high, farmers often clear forest to plant more coffee trees. Here are five years' data on prices paid to coffee growers in Indonesia.

Price ($US per pound) 0.21 0.32 0.45 0.5 0.8

Forest lost (percent) 0.29 1.81 1.81 1.78 3.05

What is the correlation (± 0.01) between the price of coffee and the forest loss in US dollars?

What is the correlation (± 0.01) between the price of coffee and the forest loss in Canada dollars, if the exchange rate is 1 Canada dollars per US dollar ?

Answer 1