Rank Correlation

Lecture: 3
 Rank Correlation

We don’t always have quantitative variables, in fact, often

we have to relate two variables which are of qualitative
nature ( Measured on Ordinal Scales).
In such situations simple correlation may not work well ( or
at least conceptually not feasible).
To tackle such situation we have rank correlation coefficient
proposed by Spearman.
It is a non-parametric measure of correlation.
Spearman rank correlation coefficient could be computed in the
following cases:
 Both variables are quantitative.
 One variable is quantitative and the other is qualitative ordinal.
 Both variables are qualitative ordinal.
 Rank Correlation Coefficient

Rank Correlation coefficient can computed by the following procedure:

 Step-1: Rank both variable in ascending order

(Take average rank if there a tie between two ranks;)
 Step-2: Calculate difference between ranks of two variables
 Step-3: Calculate Spearman’s rank correlation by following relation

6 𝑑2
𝑟𝑠 = 1 −
𝑛(𝑛2 − 1)
where “𝑑𝑖” is difference between ranks of ith observation of two variables under
consideration “n” is sample size
 Interpreted just like as simple correlation coefficient.
 Ranges from -1 to +1
Example
 6 𝑑2
𝑟𝑠 = 1 −
𝑛(𝑛2 − 1)
 𝟔 𝒅𝟐
𝒓𝒔 = 𝟏 −
𝒏 𝒏𝟐 − 𝟏

𝟔(𝟐𝟖𝟓.𝟓)
= 𝟏−
𝟏𝟎(𝟏𝟎𝟐 −𝟏)

= -0.73
 Following is the national ranking of 10 departments from
two different universities of Pakistan. Find correlation
between ranks.

Uni-1 Uni-2 Research question 1: Is there a

1 2 relationship between ranks of two
2 4 universities?
3 3 • Variable are on ordinal (Ranking
4 1 of departments)
5 7
6 5 • So to find Correlation, Rank
7 8 correlation Coefficient is
appropriate Measure !!!
8 10
9 6
10 9