Correlation Test Example. The formula for the test statistic is t r n 2 1 r2 t r n 2 1 r 2. Pearson s correlation coefficient can be positive or negative.
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For example growth in crime is positively related to growth in the sale of guns. Finally we perform either one of the following tests. The above example illustrates positive correlation one variable increases as the other increases.
Finally we perform either one of the following tests.
P value tdist 4 737 48 1 9 8e 06 05 α one tail tcrit tinv 2 05 48 1 677 4 737 tobs. 95 critical values of the sample correlation coefficient table. The p value is the combined area in both tails. This test may be used if the data do not necessarily come from a bivariate normal distribution.
