In this topic, we will be considering two related types of analyses: Correlation and Simple Linear Regression. These techniques can be used to describe the relationship between two numeric variables. For example, you may recall in Topic 2 that we considered the relationship between income per person (GDP per capita, PPP$ inflation-adjusted) and the Happiness Index ( 2021). We will again consider the relationship between these two variables, but this time we will focus our analysis on countries whose GDP per capita is between $10,000 and $50,000, as depicted in the below scatter plot:

We will begin by considering the correlation between these two variables, followed by a simple linear regression analysis.

References 2021. “Free Data from World Bank via, CC-BY License.” 2021.