Students in the Economics class discussed in given Exercise also wrote these conclusions. Explain the mistakes they made.
a) There was a very strong correlation of 1.22 between Life Expectancy and GDP.
b) The correlation between Literacy Rate and GDP was 0.83. This shows that countries wanting to increase their standard of living should invest heavily in education.
Exercise :
Correlation errors. Your Economics instructor assigns your class to investigate factors associated with the gross domestic product (GDP) of nations. Each student examines a different factor (such as Life Expectancy, Literacy Rate, etc.) for a few countries and reports to the class. Apparently, some of your classmates do not understand Statistics very well because you know several of their conclusions are incorrect. Explain the mistakes in their statements below.
a) My correlation of -077.2 shows that there is almost no association between GDP and Infant Mortality Rate.
b) There was a correlation of 0.44 between GDP and Continent.