Kendall's Tau is calculated by comparing the number of concordant and discordant pairs of observations. A pair of observations is concordant if the ranks for both variables increase together, and discordant if one rank increases while the other decreases. The formula for Kendall's Tau (τ) is: τ = (Number of Concordant Pairs - Number of Discordant Pairs) / (n(n-1)/2) where n is the number of observations.
