Student Name: Christian A.

Taghoy Semester/Year: Summer 2018

Course: EDUC 602 – Inferential Statistics Submitted To: Dr. Edsel Inocian, Ph.D.

Pearson Correlation

Situation:

A student wants to find out if the time spent in college would have a significant relationship on the
annual income of a person when he would be working after graduation. Henceforth, in his research he
gathered six participants and recorded their number of years spent in college and their subsequent
yearly income.

Below is the data that was gathered:

Years of College Annual Income

0 36,000.00
1 36,000.00
3 84,000.00
4 252,000.00
4 264,000.00
6 420,000.00

Step 1: State the Problem

Is there an impact on annual income of a person with the number of years he/she spent in college?

Step 2: State the Hypothesis

H0 = There is no significant relationship between the number of years spent in college and the
subsequent annual income.

Ha = There is significant relationship between the number of years spent in college and the subsequent
annual income.

Step 3: Identify the Test statistic to be used & select a Level of Significance

Pearson Correlation Coefficient; = 0.05

Step 4: Compute the Test Statistic

Using SPSS:

Step 5: Formulate the Decision Rule, Critical Regions and state the Findings

Decision Rule: Accept H0 if computed p-value (Sig. (2-tailed)) is greater than 0.05 or reject the null
hypothesis H0 if p-value ≤ 0.05;

Finding: Sig. (2-tailed) 0.006 is less than  0.05

Step 6: Make a Decision

Reject the null hypothesis H0

Step 7: Interpret the test results

There is significant relationship between the number of years spent in college and the subsequent
annual income.

Step 8: Conclusion

The result of the research confirms that years spent in college does have an effect on subsequent
income. As the years spent in college increase, the subsequent annual income also increases.

Step 9: Implications

Graduating in college plus any additional years in post-graduate courses could increase the potential
earning of the person. This research could also explain why doctors, lawyers, engineers and some
academicians who spent more than 4 years in college and some years more in post graduate studies do
have larger income compared to individuals who spent 0 to 4 years of college.