ETC1000 / ETC9000 Business and Economic Statistics

Semester 1, 2010

Demonstration Lecture Week 3: Correlation, Covariance and Scatter Plots

This lecture provides examples of the material taught in this weeks lectures, to help
you see its potential for real world application, and to reinforce the ideas being
communicated.

Case Study: Attendance at lectures and your final mark!

There is a wide range of views among lecturers and students about the benefits of
attending lectures. Some say that with good quality, complete lecture notes and the
availability of audio lectures, there is little need to actually physically attend. Others
argue that a face-to-face lecture is a much better way to learn than simply reading or
listening on-line. Mostly it is lecturers who take this view after all, who wants to
stand up and talk to a half-empty lecture theatre?

Is there evidence to support either view?

In 2009 one of the lecturers in Business and Economics decided to get some data to
try and address the question. She hoped that it would show that attendance at lectures
helps a lot, and that she could use this evidence to persuade students to attend lectures
more regularly.

Lets see whether the results worked out as she hoped.

Students were asked to record attendance at lectures throughout the semester, and
these will be compared with their final mark in the unit. Data is available for 100
students. The maximum number of lectures they could attend is 24 (12 weeks x 2
lectures per week).

Look first at some descriptive statistics on number of lectures attended.

Number of Lectures attended

Mean 15.62
Standard Error 0.481743
Median 16
Mode 18
Standard Deviation 4.817435
Sample Variance 23.20768
Kurtosis -0.736
Skewness -0.08733
Range 18
Minimum 6
Maximum 24
Sum 1562
Count 100

Now lets move to the potential relationship between attendance at class and the final
mark a student achieves. We look at this first with descriptive statistics for those who
attended 15 or less lectures, and compare with those who attended more than 15
lectures.

Attended 15 or less Attended 16 or more
Final Mark Final Mark

Mean 58.1087 Mean 68.11111
Standard Error 1.601397 Standard Error 1.32325
Median 59.5 Median 68
Mode 59 Mode 64
Standard
Deviation 10.8612
Standard
Deviation 9.72386
Sample
Variance 117.9657
Sample
Variance 94.55346
Kurtosis 3.820277 Kurtosis 1.105246
Skewness -1.37546 Skewness -0.36536
Range 62 Range 53
Minimum 16 Minimum 39
Maximum 78 Maximum 92
Sum 2673 Sum 3678
Count 46 Count 54

Note the much higher mean and median for those who attend the higher number of
lectures.

Now consider a scatter plot.

Final Mark
0
10
20
30
40
50
60
70
80
90
100
0 5 10 15 20 25 30


What do we learn from this scatter plot?

There does appear to be a relationship (the dots are not totally random), it is positive
(higher attendance is associated with a higher mark), and a linear model would do a
reasonable job of summarising the relationship.

The message is that attending more lectures is associated with a higher mark in the
unit.

To get a handle on the strength of the relationship, lets calculate the correlation:


Number
of
Lectures
attended
Number of Lectures
attended 1
0.612081 1

A correlation of 0.612 indicates a reasonably clear relationship, but not a really strong
one. There are obviously a number of other factors that contribute to a students final
mark other than attending lectures. Some of these might be measurable things like
mathematical ability, VCE ENTER score, who the tutor is, etc. Others might be
individual-specific unmeasurable things like basic intelligence / ability, motivation,
etc.

Theres a couple of provisos

1. Correlation is not Causality

All we have shown is that attendance at lectures is associated with better final marks.
But we cannot prove with this analysis that attending more lectures will lead to an
improved mark. Maybe this correlation between these two factors is due to some
other common causal factor.

Eg. One scenario: students who attend lectures are generally more diligent and
organised, and hence work harder on their assignments and exam preparation, thus
performing well in their final mark. So it is not attending lectures per se that
improves your final mark, it is your diligence and organisational skills.

Determining causality is difficult!

2. Outliers

What if we had one freak student who was brilliant and hard working, but never
attended lectures they listened online instead. They attend just one lecture, but
scored 98%.

Lets change person number one in this way, and see what happens.

Final Mark
0
20
40
60
80
100
120
0 5 10 15 20 25 30




Number of Lectures
attended
Final
Mark
Number of Lectures
attended 1
Final Mark 0.483083 1



Now we have a correlation of only 48%. Even though we have 100 students in the
sample, this one outlier person can have quite a big impact on the correlation value.