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/Correlation Coefficient and Simpson's Paradox
Correlation Coefficient and Simpson's Paradox
Learn about correlation coefficients and Simpson's paradox in multiple regression.
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Correlation coefficient
Recall that the correlation coefficient between income in thousands of dollars and credit card debt was 0.464. What if, instead, we looked at the correlation coefficient between income and credit card debt, but where income was in dollars and not thousands of dollars? This can be done by multiplying income by 1000.
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credit_ch6 %>% select(debt, income) %>%mutate(income = income * 1000) %>%cor()
We say that the correlation coefficient is invariant to linear transformations. The correlation between