Share
Explore BrainMass

Correlation Between Gas and Passenger/Mile Ratio

The management of a regional bus line thought its cost of gas might be correlated with its passenger/mile ratio. Comment on the data and correlation matrix below.

Average Wholesale Cost of Gas Passenger/Mile Ratio
56.5 8.37
59.4 8.93
63.0 9.15
65.6 9.79
89.0 11.20

Correlation Coefficients/Probability > l R l
under HO: RHO = 0/N = 5

Year Price Mile
Year 1.00000 .87016 .95127
.0000 .0551 .0128
Price .87016 1.00000 .97309
.0551 .0000 .0053
Mile .95127 .97309 1.0000
.0128 .0053 .00000

Solution Preview

Looking at the data, we can see that both the cost of gas and passenger/mile ratio has been increasing from year to year, with the biggest increase occurring between year 4 and year 5.

The correlation matrix can be interpreted as follows:

First, we should ignore the diagonal values, since they represent each variable correlated with itself. Naturally the ...

Solution Summary

Looking at the data, we can see that both the cost of gas and passenger/mile ratio has been increasing from year to year, with the biggest increase occurring between year 4 and year 5.

$2.19