Correlation Analysis( Nominal Data) X(chi-square) test (Observed-Expected) Expected The larger the X2 value, the more likely the variables are related The cells that contribute the most to the x2 value are those whose actual count is very different from the expected count Correlation does not imply causality f of hospitals and of car-theft in a city are correlated Both are causally linked to the third variable: population 1414 Correlation Analysis (Nominal Data) ◼ Χ2 (chi-square) test ◼ The larger the Χ 2 value, the more likely the variables are related ◼ The cells that contribute the most to the Χ 2 value are those whose actual count is very different from the expected count ◼ Correlation does not imply causality ◼ # of hospitals and # of car-theft in a city are correlated ◼ Both are causally linked to the third variable: population  − = Expected Observed Expected 2 2 ( ) 