Title: Two Continuous Variables continued.
Course: UGQuants (SSPS) > Section: Data Visualisation

Two Continuous Variables continued

Where a causal relationship is believed to exist, convention is that the “explanatory” variable is placed on the x-axis (along the horizontal side of the scatter plot), while the dependent variable is placed on the y-axis.

When considering a relationship between two variables, attention should be paid to the direction, strength and shape of the correlation.

The direction of a correlation reflects how the values of the two variables are related to each other. If high values on one variable are associated with high values on the other, a positive relationship is said to exist. If higher values on one variable are associated with lower values on the other, a negative relationship is said to exist.

The following two figures show you:

- First the strong, positive correlation of the infant mortality rate with a country’s fertility rate (can you determine the causal effect here?), and subsequently
- The moderately strong negative correlation of the rate of people in a country’s population employed in agriculture by the percentage of people living in cities.

Figure 14: Scatterplot of infant mortality by fertility rate

Source: WDI 2011.

Figure 15: Scatterplot of rate of employment in agriculture by rate of population living in cities

Source: WDI 2011.