Meaning of the value of Covariance
Back to the
National Survey of Youth study
the actual covariance was 3028 where height is
inches and the wages in dollars.
Suppose we measured all the heights in
centimeters, instead. There are
: What will happen to the covariance?
: So let H
be height in inches and H
height in centimeters, with W – the wages.
,W) = Cov(2.54 H
,W) = 2.54 Cov (H
So the value depends on the units and is
not very informative