Now, look at the chart, do you see where
the 8 year old car has a value of $14000? Notice how
it doesn't really go along with the rest of the data, it is an anomoly.
This would be our lurking variable because it strongly influences the
value of the correlation coefficient.
Let's try substituting the values in our calculator (L1 and L2), the x
values in L1, the y values in L2. Next press stat, scroll over to Calc,
then go down to LinReg. Next, press 2nd L1 (,) 2nd L2. An equation for
the best fit line will come up. Look at the bottom at your r value, you
should have a value of -.787. Remember the (-) is just the direction of
the graph, the closer to -1 the more related the graph is to the best
fit line. Now, let us take out our influential point, completely erase
it from the data, now do the same as above and look at your r value. It
is now -.958. As you can see this is a huge difference. When looking at
data and at correlation values, you must keep an eye out for data like
the influential point, and decide for yourself whether that data should
be regarded as an anomoly or as a legitimate piece of data.