21

i.e.

Now

Let

and

Page 7 of 11

Ranking by Manager 1
Ranking by Manager 2

10

Page 8 of 11

Compute the coefficient of rank correlation and comment on the value.

A
10

Employee

Example: Two managers are asked to ranked a group of employee in order of

potential for eventually becoming top managers. The rankings are as follows:

[Proof: see Nurul Islam Page 272]

25

20

D refers to the difference of ranks between paired items in two series.

23

17

23

Correlation Coefficient

in the population expected to be

Rank correlation method is applied when the rank order data are available or
when each variable can be ranked in some order. The measure based on this
method is known as rank correlation coefficient. This method is applied to the
situation in which exact numerical measurement are not available. For instance,
sincerity or honesty of each employee.
Coefficient denoted by and defined as

The coefficient of correlation

Ans:

15

12

we get

The probable error of the coefficient of correlation is obtained as

Probable Error:

Which concludes

Similarly using

Example: Show that the coefficient of correlation lies between -1 and +1.

ANS: r = +0.865

Advertising
10
Expenses(Lakhs)
Sales (Lakhs)
14

Example:
expenses from the data given below and interpret its value:

Example: Calculate the coefficient of correlation and interpret its value.

Age Group
Sum Assured
10,000
20,000
30,000
40,000
50,000
20-30
4
6
3
7
1
30-40
2
8
15
7
1
40-50
3
9
12
6
2
50-60
8
4
2
ANS: r = -0.256

Example: Calculate the coefficient of correlation and interpret its value.

Sales
Advertising Expenditure
Revenue
5-10
10-15
15-20
20-25
75-125
4
1
125-175
7
6
2
1
175-225
1
3
4
2
225-275
1
1
3
4
ANS: r = 0.596

Employee
A
B
C
D
E
F
G
H
I
J
N=10

10
2
1
4
3
6
5
8
7
9

9
4
2
3
1
5
6
8
7
10

1
4
1
1
4
1
1
0
0
1
=14

86

Final test

92
89
87
86
83
77
71
63
53
50
N=10

Solution:
Preliminary test

92

Preliminary test

10
9
8
7
6
5
4
3
2
1

83

89
77

86

86
83
91
77
68
85
52
82
37
57

Final test

91

87
68

83

9
7
10
5
4
8
2
6
1
3

85

77
52

71
37

53
57

50

Page 9 of 11

1
4
4
4
4
9
4
9
1
4
=44

82

63

Example: Compute the rank correlation coefficient for the following data od 2
tests given to candidates for a critical job and comment on the value.

Thus we find that there is a high degree of positive correlation in the ranks
assigned by the two managers.

Solution:

15
20
28
12
40
60
20
80
N=8

Marks in Bangla

Solution:

2
3.5
5
1
6
7
3.5
8

30

20

40
30
50
30
20
10
30
60

Final test

40

Marks in English

A
15

Marks in Bangla

Applicant

50

28

6
4
7
4
2
1
4
8

30

12

20

40

10

60

60

80

Page 10 of 11

16
0.25
4
9
16
36
0.25
0
=81.5

30

20

Example: An examination of eight applicants for a post was taken by a firm.

From the marks obtained the applicants in the Bangla and English papers,
Compute the rank correlation coefficient:

An adjustment of the above formula is made when ranks are equal

Tie in Ranks:

Thus we find that there is a high degree of positive correlation between

preliminary test and final test

Marks 20 is repeated 2 times, hence

hence
.

Page 11 of 11

and Marks 30 is repeated 3 times,