Negative or Inverse Correlation is a statistical relationship between two variables in which one variable increases as the other decreases, and vice versa. This type of relationship is typically seen in economic data, where rising prices are associated with falling demand (and vice versa). Inverse relationships can also be observed in other areas, such as crime rates and educational attainment.There are a number of reasons why inverse relationships may occur. In the case of economics, it could be due to changes in consumer preferences or shifts in the market. For example, if a new product comes onto the market that is cheaper and better quality than existing products, then demand for the old products will fall as consumers switch to the new option. Similarly, if there is an increase in taxes on a particular good or service, this could lead to a decrease in demand and an increase in prices. Inverse relationships can also occur simply because two variables are measuring different things; for instance, crime rates might be high where there is little police presence (because criminals feel they can operate with impunity), but low where there is strong police presence (because criminals know they are more likely to get caught).In any case, understanding inverse relationships between variables can be important for making predictions and decisions based on data. If analysts know that price and demand have an inverse relationship, then they can anticipate how changes in one variable will affect the other – e.g., if prices go up then businesses might expect lower sales volume.
