## Case Example: The SAT and

Family Income Levels

## What exactly does the infamous Scholastic Aptitude Test measure? Previous statistical tests have come to the conclusion that there is no correlation between high scores on the SAT and career success. But is there a correlation between high scores and the level of income of students' families? The following is a sample of university students' SAT scores and their corresponding family annual incomes in the thousands of dollars:

## SAT scores

## 1070

## 1470

## 1230

## 1100

## 1460

## 1510

## 900

## 1020

## Family Income in

thousands of $## 79

## 95

## 85

## 75

## 120

## 100

## 42

## 59

## Excel is particularly helpful in solving for correlation and regression, as it contains built-in equations for both in the tools menu.

## When we plug our information into the formula, we find that

r=.903Since this is a number which closely approaches 1, we can deduce that there is a positive correlation between the SAT scores and income.

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