Correlation and Hypothesis Testing
Conducting a hypothesis test of correlation is similar to the methods of hypothesis testing with which we have grown familiar, with a few noticable differences:
- The relevant distribution is the t-distribution, with r=0 at the center (mean).
- The rejection region is determined through degrees of freedom and significance level. The difference is the change in the method for determining the Degrees of Freedom:
Degrees of Freedom = n - 2
The distribution is entered by converting the r value with the following equation:
Case Example: The SAT and Family Income