1) Researchers recorded the temperatures at Castleton Square Mall in Indianapoli
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Question
1)
Researchers recorded the temperatures at Castleton Square Mall in Indianapolis in November and December 2014, then again in April and May 2015. For these same days, they recorded the mall sales. Other team members did the same thing at East Towne Mall near Madison, WI. The correlation coefficient between these variables at Castleton Square was -0.812 and at East Towne Mall was -0.858. Both were significant at the 1% level. (Though we do not cover it in our course, the significance of the correlation coefficient can be tested with a t test.) Do these correlations show that warmer temperatures cause sales at malls to decline? Briefly explain your answer using an interpretation of these correlation coefficients
Explanation / Answer
MALL SALES vs TEMPERATURE
High Negative Correlation ( -1 being the perfect negative correlation) suggests that when the temperature goes up, sales fall down and vice versa. But we cannot say this in terms of causality: as high correlation doesnot imply causation ie temperature causes sales to vary. We can infer these that if these two variables are observed simultaneously it is expected to have significantly high opposite readings ( one high and one low).
R Castelon Square Mall -0.858 East Towne Mall -0.812Related Questions
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