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Sec 9.3 - 2020 Linear Regression

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23 views

Sec 9.3 - 2020 Linear Regression

Uploaded by

Lungelo Zulu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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9.

3: Linear Regression
If a linear relationship between two
This linear equation is the
variables exist, a linear equation
line of best fit through
that describes this relationship can
the observed/plotted
then be obtained.
points.

Determined by minimizing
the sum of the squared
differences shown by the
blue vertical lines.
The line of best fit
Line of best fit is also known as
the least squares
regression line.

The linear regression equation is given by: � = 𝒂𝒂 + 𝒃𝒃𝒃𝒃


𝒚𝒚

where: � is the fitted/estimated 𝒚𝒚-value


𝒚𝒚
𝒂𝒂 is the y-intercept.
𝒃𝒃 is the gradient/slope of the line.
𝒙𝒙 is the independent variable.
Example Continued: 𝒂𝒂 and 𝒃𝒃 can also be calculated using
STAT mode on the calculator

� = 𝒂𝒂 + 𝒃𝒃𝒃𝒃
𝒚𝒚 � = 𝟔𝟔. 𝟓𝟓𝟓𝟓 + 𝟐𝟐. 𝟔𝟔𝟔𝟔 𝒙𝒙
𝒚𝒚
This linear equation can now be used to estimate/predict the number
of copies that will be sold for different advertising budgets.

Question: How many copies of the book would be expected to get


sold when the advertising budget is R27 600?

Solution: Since 𝑥𝑥 is measured in thousands, we


substitute 𝑥𝑥 = 27.6 into the regression line.

� = 𝟔𝟔. 𝟓𝟓𝟓𝟓 + 𝟐𝟐. 𝟔𝟔𝟔𝟔 (𝟐𝟐𝟐𝟐. 𝟔𝟔) = 𝟕𝟕𝟕𝟕. 𝟓𝟓𝟓𝟓𝟓𝟓


𝒚𝒚

We would expect approximately 79 000 copies of the book to be


sold when the advertising budget is R27 600.
Some words of
caution:
1
The linear
relationship
2
between Y and X Only relationships
is often valid for between variables
values of X within
a certain range.
that could be related 3
in a practical sense
should be explored If variables are not
linearly related, it
does not mean that
they are not
related.
Regression and Correlation

STEP 1: STEP 2:
Select Data Analysis
Select Data tab
STEP 3: Select Regression STEP 4: Select Input Range

STEP 5: Select Ouput Range


Interpreting Excel Outputs:

|𝒓𝒓|
correlation coefficient
𝒓𝒓 = 𝟎𝟎. 𝟗𝟗𝟏𝟏𝟏𝟏𝟏𝟏
𝒓𝒓𝟐𝟐 Strong positive linear
relationship

� = 𝟔𝟔. 𝟓𝟓𝟓𝟓 + 𝟐𝟐, 𝟔𝟔𝟔𝟔 𝒙𝒙


𝒚𝒚
Coefficient of determination
𝒓𝒓𝟐𝟐 = 𝟎𝟎. 𝟖𝟖𝟒𝟒𝟒𝟒𝟒𝟒

85% of the variation of


y-values around the
mean are explained by
the x-values

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