STM1001 Topic 8: Correlation and Simple Linear Regression
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 (Gapminder.org 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.