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Correlation — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsCorrelation3 Marks
Question
What is Probable error? What is its utility?
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Answer

It is used to help in the determination of the Karl Pearson's coefficient of correlation'r'. Due to this' r' is corrected to a great extent but note that 'r' depends on the random sampling and its conditions. it is given by$\text{P.E}=0.6745\bigg[\frac{1-\text{r}^2}{\sqrt{\text{n}}}\bigg]$If the value of r is less than P. E., then there is no evidence of correlation i.e. r is not significant If r is more than 6 times the P. E. 'r' is practically certain .i.e. significant. By adding or subtracting P. E. to 'r' , we get the upper and Lower limits within which'r' of the population can be expected to lie. $\text{symbolically}=\text{e = r}\pm\text{P.E}$ r = Correlation (coefficient ) of the population.

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