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    Determining Coefficients of Correlation and Determination

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    The owner of Maumee Ford-Mercury wants to study the relationship between the age of a car and its selling price. Listed below is a random sample of 12 used cars sold at the dealership during the last year.

    Car Age (years) Selling Price ($000) Car Age (years) Selling Price ($000)
    1 9 8.1 7 8 7.6
    2 7 6.0 8 11 8.0
    3 11 3.6 9 10 8.0
    4 12 4.0 10 12 6.0
    5 8 5.0 11 6 8.6
    6 7 10.0 12 6 8.0

    a. If we want to estimate selling price on the basis of the age of the car, which variable is the dependent variable and which is the independent variable?
    b. Draw a scatter diagram.
    c. Determine the coefficient of correlation.
    d. Determine the coefficient of determination.
    e. Interpret these statistical measures. Does it surprise you that the relationship is inverse?

    © BrainMass Inc. brainmass.com June 3, 2020, 6:37 pm ad1c9bdddf
    https://brainmass.com/statistics/descriptive-statistics/determining-coefficients-of-correlation-and-determination-68539

    Solution Summary

    This solution involves drawing a scatter diagram and calculating coefficients of correlation and determination.

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