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Merits and Demerits of Correlation

Karl Pearson's method of correlation has both merits and demerits. The merits are that it can determine the degree, direction, and estimate dependent variables through regression equations. It also has algebraic properties that make calculations easier. However, it also has demerits such as being difficult to calculate, affected by extreme values, based on assumptions that may not always hold, likely to be misinterpreted with homogeneous data, time-consuming compared to other methods, and subject to probable errors.

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Nusrat Riya
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9K views1 page

Merits and Demerits of Correlation

Karl Pearson's method of correlation has both merits and demerits. The merits are that it can determine the degree, direction, and estimate dependent variables through regression equations. It also has algebraic properties that make calculations easier. However, it also has demerits such as being difficult to calculate, affected by extreme values, based on assumptions that may not always hold, likely to be misinterpreted with homogeneous data, time-consuming compared to other methods, and subject to probable errors.

Uploaded by

Nusrat Riya
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Merits and Demerits of Correlation

Merits

The following are the chief points of merit that go in favour of the Karl Pearson’s method of
correlation:

 This method not only indicates the presence or absence of correlation between any two
variables but also, determines the exact extent, or degree to which they are correlated.

 Under this method, we can also ascertain the direction of the correlation i.e. whether the
correlation between the two variables is positive, or negative.

 This method enables us in estimating the value of a dependent variable with reference to
a particular value of an independent variable through regression equations.

 This method has a lot of algebraic properties for which the calculation of co-efficient of
correlation, and a host of other related factors viz. co-efficient of determination, are made
easy.

Demerits

Despite the above points of merits, this method also suffers from the following demerits:

 It is comparatively difficult to calculate as its computation involves intricate algebraic


methods of calculations.

 It is very much affected by the values of the extreme items.

 It is based on a large number of assumptions viz. linear relationship, cause and effect
relationship etc. which may not always hold well.

 It is very much likely to be misinterpreted particularly in case of homogeneous data.

 In comparison to the other methods, it takes much time to arrive at the results.

 It is subject to probable error which its propounder himself admits, and therefore, it is
always advisable to compute it probable error while interpreting its results.

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