Spearman's Rank

What is correlation?

It is used to examine the degree of relationship between two numerical variables

What is a positive correlation?

When two variables increase or decrease together

What is a negative correlation?

When one variable increase, the other variable decreases

What is a correlation coefficient, in regards to Spearman’s?

• An index measuring between +1 (perfect positive correlation) and -1 (perfect negative correlation) with the value of 0 showing that there is no relationship between the two variables

• The nearer the coefficient is to +1 or -1 the stronger the relationship is between the two variables

Advantages of Spearman’s Rank?

• Identifies and tests the strength of a relationship between two sets of data

• This method is much simpler to carry out and understand. It gives the same result as the Pearson’s method if none of the values/ranks are repeated

• Shows whether direction of relationship is positive or negative

• Tells exactly the strength of the relationship unlike the scattergraph which only gives a general indication      

Disadvantages of Spearman’s Rank?

• The test uses data which can be ranked but this means that the test loses some of its accuracy as it is not using the actual values

• Can only test for linear relationships so a scattergraph could be drawn to see if this is the case

• Requires a sample size of at least 7 observations, the larger the sample size the more reliable the result

• Ranking is inherently inaccurate as it ignores and takes no account of the magnitude of the difference in the values

• This lack of refinement can make the correlation stronger or weaker than it actually is