Given the following information about the production and demand of a commodity obtain the two regression lines:
X | Y | |
Mean | 85 | 90 |
S.D. | 5 | 6 |
The coefficient of correlation between X and Y is 0.6. Also estimate the production when demand is 100.
Solution
Given, `bar x = 85, bar y = 90, sigma_"X" = 5, sigma_"Y" = 6`, r =0.6
`"b"_"YX" = "r" sigma_"Y"/sigma_"X" = 0.6 xx 6/5 = 0.72`
`"b"_"XY" = "r" sigma_"X"/sigma_"Y" = 0.6 xx 5/6 = 0.5`
The regression equation of Y on X is
`("Y" - bar y) = "b"_"YX" ("X" - bar x)`
(Y - 90) = 0.72 (X - 85)
Y - 90 = 0.72 X - 61.2
Y = 0.72X - 61.2 + 90
Y = 28.8 + 0.72 X ....(i)
The regression equation of X on Y is
`("X" - bar x) = "b"_"XY" ("Y" - bar y)`
(X - 85) = 0.5(Y - 90)
X - 85 = 0.5 Y - 45
X = 0.5 Y - 45 + 85
X = 40 + 0.5Y ....(ii)
For Y = 100, from equation (ii) we get
X = 40 + 0.5(100) = 40 + 50 = 90
∴ The production is 90 when demand is 100.
Notes
The answer in the textbook is incorrect.