Jobless Rate (%) Delinquent Loan (%) Jobless Rate (%) Delinquent Loan (%) Metro Area Metro Area Atlanta Boston Charlotte 7.1 5.2 7.8 7.8 7.02 5.31 5.38 New York 6.2 6.3 7.0 5.78 6.08 10.05 Chicago Dallas Denver Detroit 5.40 5.00 4.07 6.53 5.57 Orange County Orlando Philadelphia Phoenix Portland 6.2 5.5 6.5 6.0 4.75 7.22 3.79 3.62 5.8 5.8 9.3 Raleigh Sacramento St. Louis San Diego San Francisco Houston Jacksonville 5.7 7.3 7.6 8.2 8.3 7.5 7.1 9.24 4.40 6.91 5.57 3.87 te 6.99 11.12 Las Vegas Los Angeles 7.56 6.8 5.5 7.5 Miami 7.1 6.3 6.6 12.11 4.39 4.78 Seattle Minneapolis Nashville Tampa 8.42 Source: The Wall Street Journal, January 27, 2009.
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
The recent economic downturn resulted in the loss of jobs and an increase in delinquent
loans for housing. In projecting where the real estate market was headed in the coming
year, economists studied the relationship between the jobless rate and the percentage of
delinquent loans. The expectation was that if the jobless rate continued to increase, there
would also be an increase in the percentage of delinquent loans. The following data show
the jobless rate and the delinquent loan percentage for 27 major real estate markets.
a. Compute the
rate and the percentage of delinquent housing loans? What is your interpretation?
b. Show a
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