E yr2 e y2 1r2 e y2

an expression that we will find very useful later.

A quantity closely related to but conceptually very much different from r2 is the coefficient of correlation, which, as noted in Chapter 1, is a measure of the degree of association between two variables. It can be computed either from r = ±4r2 (3.5.12)

or from its definition

24The population correlation coefficient, denoted by p, is defined in App. A.

86 PART ONE: SINGLE-EQUATION REGRESSION MODELS

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Rules Of The Rich And Wealthy

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