Correlation and

Causation
Correlation and Causation

If the two variables have a significant relationship, then any of the following possible
relationships exists between them:

• There is a direct cause-and-effect relationship between the variables; that is x causes

y
• There is a reverse cause-and effect relationship between the variables; that is y causes
x
• The relationship between the variables may be caused by a third variable.
• There may be a complexity of interrelationships among many variables.
• The relationship may be coincidental.

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Regression Analysis

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 Regression Analysis

Is the process of formulating a mathematical model that can be

used to predict or determine one variable by another variable/s.

In Simple Regression Analysis, only straight line relationship

between the two variables is examine: one dependent variable and
one independent variable

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This linear relationship can be expressed in
an equation in the form:

predicted value of the dependent variable

a = the y-intercept
B = slope of the line

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For the slope of the line
b=

For the y-intercept,

a= -b
 Example. A law enforcement officer obtained a data on the
performance rating of the polices offices and the crime solution
efficiency in their respective areas of responsibilities for the last 6
months. Use the equation of the regression line to predict the crime
solution efficiency of an area with the police office rating of 82.

Performance rating (X) 85 89 91 93 84 89

Crime rate (Y) 89 90 92 92 88 90

 month X Y XY X²

1 85 89 7565 7225

2 89 90 8010 7921

3 91 92 8371 8281

4 93 92 8556 8649

5 84 88 7392 7056

6 89 90 8010 7921

TOTAL =531 =541 =47, 905 =47, 053

For the slope of the line
b=
b = 0.4454

For the y-intercept,

a = - (0.4454)
a = 50.75

For the regression equation, solve for the crime solution efficiency if the police performance
rating is 82.
a + bx
= 50.75 + (0.4454)(82)
= 87.23
a + bx
= 50.75 + 0.4454(82)
= 87.23
Coefficient of Determination

Denoted by r², is a number that expresses the proportion of the total

variation in the values of the dependent variable that can be explained
by the linear relationship with the values of the independent variable.

Coefficient of determination, r² = (r)² * 100

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 Using the data in the example, determine by how much of the
variation of the crime solution efficiency is due to the variations
of the performance rating of the police office. Upon computing
the correlation coefficient, we get r = 0.959

Coefficient of determination.
r² = (0.959)² * 100
r² = 91.97%

Coefficient of alienation
100 % - 91.97%
= 8.03%