Profits of 20 consumer food companies are shown.
(a) Convert the data to ranks. Check the column sums.
(b) Calculate Spearman's rank correlation coefficient. Show your calculations.
(c) At α = .01 can you reject the hypothesis of zero rank correlation?
(d) Check your work by using MegaStat.
(e) Calculate the Pearson correlation coefficient (using Excel).
(f) Why might the rank correlation be preferred?

Transcribed Image Text:

Profit of 20 Food Consumer Products Firms (S millions) Company 2004 2005 595 775 356 134 105 15 917 566 458 186 27 96 787 107 211 3,568 647 Campbell Soup ConAgra Foods Dean Foods Del Monte Foods Dole Food Flowers Foods General Mills H. J. Heinz Hershey Foods 285 165 134 1,055 591 232 -26 Interstate Bakeries J. M. Smucker Kellogg Land O'Lakes 891 PepsiCo Ralcorp Holdings Sara Lee Smithfield Foods Wm. Wrigley, Jr. 215 4,212 65 1272 227 493 1,221 26 446