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Regression

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12 views1 page

Regression

Uploaded by

jamespda4
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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REGRESSION

If two variables are significantly correlated, and if there is some theoretical basis for doing so, it is
possible to predict values of one variable from the other. This observation leads to a very important
concept known as ‘Regression Analysis’. Regression analysis, in general sense, means the estimation
or prediction of the unknown value of one variable from the known value of the other variable.

 Uses a variable (x) to predict some outcome variable (y)

 Tells you how values in y change as a function of changes in values of x

 Correlation describes the strength of a linear relationship between two variables

 Linear means “straight line”

 Regression tells us how to draw the straight line described by the correlation

 Calculates the “best-fit” line for a certain set of data

The regression line makes the sum of the squares of the residuals smaller than for any other line

Regression minimizes residuals

By using the least squares method (a procedure that minimizes the vertical deviations of plotted points
surrounding a straight line) we are
able to construct a best fitting straight line to the scatter diagram points and then formulate a regression
equation in the form of:

Regression Equation
Suppose we have a sample of size ‘n’ and it has two sets of measures, denoted by x and y. We can
predict the values of ‘y’ given the values of ‘x’ or vice versa by using the equation, called the
Regression Equation.
ŷ = a + b x, where the coefficients a and b are given by

The symbol ŷ refers to the predicted value of y from a given value of x from the regression equation

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