Compute the correlation coefficient

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Reference no: EM133075557

Question - Statistics Analysis - At the beginning of 2009, the economic downturn resulted in the loss of jobs and an increase in delinquent loans for housing. The national employment rate was 6.5% and the percentage of delinquent loans was 6.12% (The Wall Street Journal, January 27, 2009). In projecting where the real estate market was headed in the coming year, economics studied the relationship between the jobless rate and the percentage of delinquent loans. The expectation was if the jobless rate continued to increase, there would also be an increase in the percentage of delinquent loans. The date below show the jobless rate and the delinquent loan percentage for 27 major real estate markets.

Metro Area

Jobless Rate (%)

Delinquent Loan (%)

Atlanta

7.1

7.02

Boston

5.2

5.31

Charlotte

7.8

5.38

Chicago

7.8

5.40

Dallas

5.8

5.00

Denver

5.8

4.07

Detroit

9.3

6.53

Houston

5.7

5.57

Jacksonville

7.3

6.99

Las Vegas

7.6

11.12

Los Angeles

8.2

7.56

Miami

7.1

12.11

Minneapolis

6.3

4.39

Nashville

6.6

4.78

New York

6.2

5.78

Orange Country

6.3

6.08

Orlando

7.0

10.05

Philadelphia

6.2

4.75

Phoenix

5.5

7.22

Portland

6.5

3.79

Raleigh

8.3

3.62

Sacramento

7.5

9.24

St. Louis

7.1

4.40

San Diego

6.8

6.91

San Francisco

5.5

5.57

Seattle

7.5

3.87

Tampa

5.3

8.42

Required -

1. Compute the correlation coefficient.

2. Is there a positive correlation between the jobless rate and the percentage of delinquent housing loans?

3. What is your interpretation?

Reference no: EM133075557

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