Question

If precisely measured data are available the simple correlation coefficient is ______ 

Options

• more accurate than the rank correlation coefficient

• less accurate than the rank correlation coefficient

• as accurate as the rank correlation coefficient

Answer 1

If precisely measured data are available the simple correlation coefficient is less accurate than the rank correlation coefficient.

Explanation:

Generally, all the properties of Karl Pearson's coefficient of correlation are similar to that of the rank correlation coefficient. However, the rank correlation coefficient is generally lower or equal to Karl Pearson's coefficient. The reason for this difference between the two coefficients is because the rank correlation coefficient uses ranks instead of the full set of observations that leads to some loss of information. If the precisely measured data are available, then both the coefficients will be identical.