CORRELATION BETWEEN SALARY AND

EXPENSES
Expense is dependent variable= X
Salary is independent variable= Y

n=
YEAR

(XY)

(000)

(000)

(000)

(000)

(000)

1993

20

400

15

225

300

1995

35

1225

28

784

980

1997

40

1600

33

1089

1320

1999

52

2704

43

1849

2236

2001

65

4225

55

3025

3575

2003

80

6400

66

4356

5280

2005

90

8100

75

5625

6750

2007

90

8100

78

6084

7020

2009

150

22500

110

12100

16500

2011

180

32400

130

16900

23400

2013

200

40000

130

16900

26000

=689

=933

37

61

n=
11

1002

=
127654

= 763

Correlation Formula (r):

Answer:

r =0.98850

The relationship between salary and expense are POSITIVE STRONG relation.
i.e, 0.8 0.98850 1

SCATTER DIAGRAM OF SALARY AND

EXPENSE
Expense is dependent variable= X
Salary is independent variable= Y

SCATTER DIAGRAM:

ILLUSTRATION:
There is a positive strong relation between salary and expense, which is obvious
from above positive slope scatter diagram. An increase in salary would be a
accompanied by an increase in expense. In other word we can say these two
quantities i.e expense and salary have a direct relation and are directly related to
each other.

CORRELATION BETWEEN FAMILY

MEMBERS AND
EXPENSE
Expense is dependent variable= X
Salary is independent variable= Y

(000)

YEAR

(000)

(XY)
(000)

1993

16

15

225

60

1995

25

28

784

140

1997

36

33

1089

198

1999

36

43

1849

258

2001

49

55

3025

385

2003

49

66

4356

462

2005

64

75

5625

600

2007

81

78

6084

702

2009

81

110

12100

990

2011
2013

9
9

81
81

130
130

16900
16900

1170
1170

=689

=61

=
n=11

= 79

599

Correlation Formula (r):

Answer:

r =0.9206

= 763

37

35

The relationship between family members and expense are POSITIVE STRONG
relation.
i.e, 0.8 0.9206 1

SCATTER DIAGRAM OF FAMILY

MEMBERS AND
EXPENSE
Expense is dependent variable= X
Family members is independent variable= Y

SCATTER DIAGRAM:

ILLUSTRATION:

There is a positive strong relation between family members and expense, which is
obvious from above positive slope scatter diagram. An increase in family members
would be accompanied by an increase in expense. In other words we can say these
two quantities i.e expense and family members have a direct relation and are
directly related to each other.

CORRELATION BETWEEN INFILATION

RATE AND
EXPENSES
Expense is dependent variable= X
Infilation rate is independent variable= Y

(000)

n = YEAR

(000)

(XY)

(000)

1993

34.77

1208.953

15

225

521.55

1995

43.56

1897.474

28

784

1219.68

1997

54.03

2919.241

33

1089

1782.99

1999

60.03

3603.601

43

1849

2581.29

2001

64.57

4169.285

55

3025

3551.35

2003

68.19

4649.876

66

4356

4500.54

2005

80.18

6428.832

75

5625

6013.5

2007

92.26

8511.908

78

6084

7196.28

2009

120.64

14554.01

110

12100

13270.4

2011

152.78

23341.73

130

16900

19861.4

2013

185.32

34343.5

130

16900

24091.6

=689

=84590.

37

58

=956.
n=11

33

=
= 105628.4

Correlation Formula (r):

763

Answer:

r =0.96210

The relationship between infilation rate and expense are POSITIVE STRONG
relation.
i.e, 0.8 0.96210 1

SCATTER DIAGRAM OF INFILATION

RATE AND
EXPENSE
Expense is dependent variable= X
Infilation rate is independent variable= Y

SCATTER DIAGRAM:

ILLUSTRATION:
There is a positive strong relation between infilation rate and expense, which is
obvious from above positive slope scatter diagram. An increase in infilation rate
would be accompanied by an increase in expense. In other words we can say these
two quantities i.e expense and infilation rate have a direct relation and are directly
related to each other.

TOPIC:

CORRELATION
CASE:
Within an organization, management changes the salary packages of its employees.
The data of one employee Mr. Qadeer is available from 1993 to 2013. The data
has three independent variabls i.e Salary, Family members and Inflation rate, and
one dependent variable i.e Expense of the Mr. Qadeer.

DATA:
YEAR
1993

SALARY

FAMILY
MEMBERS

INFLATION
RATE

20000

34.77

EXPENSE
15000

1995

35000

43.56

28000

1997

40000

54.038

33000

1999

52000

60.034

43000

2001

65000

64.57

55000

2003

80000

68.19

66000

2005

90000

80.19

75000

2007

90000

92.26

78000

2009

150000

120.64

110000

2011

180000

152.78

130000

2013

200000

185.34

130000

REQUIRED:
Calculate the correlation between
1. Salary and Expense of Mr. Qadeer.
2. Family Members and Expense of Mr. Qadeer.
3. Inflation Rate and Expense of Mr. Qadeer.

TOPIC:

REGRESSION
CASE:
The data has taken from THE EDUCATOR SCHOOL. The data has three independent
variables i.e number of students (X1), fee of each student (X2) and salary increment
on the basis of teacher experience (X3). The data has on dependent variable i.e
salary of teacher (Y).

DATA:
(n)
YEAR

( X1)
NUMBER

(X2)
STUDENT

(X3)

(Y)

SALARY

SALARY OF

OF
STUDENTS

FEE

INCREMENT
ON
EXPERIENCE

TEACHER

2003

1500

1000

3500

2004

15

1500

2000

4000

2005

17

1700

3000

4500

2006

20

1700

1000

5000

2007

25

1800

6000

2008

27

1950

6000

2009

28

2000

1000

7000

2010

30

2050

7500

2011

32

2100

1000

7500

2012

33

2500

2000

8000

2013

35

2500

2000

8000

REQUIRED:
Calculate o (Y on X1, X2 and X3).

REGRESSION
INDEPENDENT VARIABLES:
Number of students (X1).
F ee of each student (X2).
Salary experience increment (X3).

DEPENDENT VARIABLE:
Salary of the teachers.

YEAR
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013

^2

49

1500

15

225

1500

17

289

1700

20

400

1700

25

625

1800

27

729

1950

28

784

2000

30

900

2050

32

1024

2100

33

1089

2500

35

1225

2500

X
^2
225000
0
225000
0
289000
0
289000
0
324000
0
380250
0
400000
0
420250
0
441000
0
625000
0
625000
0

1000

X^2
100000
0
400000
0
900000
0
100000
0

6000

0
100000
0

6000

0
100000
0
400000
0
400000
0

7500

1000
2000
3000

1000
0
1000
2000
2000

Y
3500
4000
4500
5000

7000

7500
8000
8000

Y^2
122500
00
160000
00
202500
00
250000
00
360000
00
360000
00
490000
00
562500
00
562500
00
640000
00
640000
00

DATA:
X = 269,

X^2= 7339,

X =21300,

XY= 1778000.

X^2= 42435000,

XY=

X^2= 25000000,

XY=

135000000.

X = 13000,
76500000.

Y= 67000,

= 4.35E+08.

X= 21.727,

X= 1936.36,

X=

118.1818.

= 183.436,

= 4.4215,

= -0.2783.

FORMULA:

o = Y- ( X + X+ X)
And,
=

Answer:

o= -698.78

o is consider to be the y-intercept for the given data set and defines or estimate
the value of Y (salary of the teachers, when all pridictors or explanatory variables

X, X, X (i.e number of students, fee of student and salary increment on the

basis of teacher experience) becomes zero.