Table of Contents
Regression Analysis
“Eyeball” Method
One of many trend lines using “eyeball” method
If Population = 38,000, how many units sold?
Another Method: “Least Squares”
Use Excel to complete table
Calculate a & b using Excel
Calculate b
Calculate a
If population = 38,000, how many units sold?
Regression Line for Units Sold and Population
Least Squares
Error = y - y hat
Least Squares produces regression line with best fit
Back to your spreadsheet ...
Back to your spreadsheet ...
Explained & Unexplained Variation
Explained & Unexplained Variation
R Square (R2)
Suppose y is not really dependent upon x …
How can we be sure that y is a function of x?
t is a test of significance
Simple Vs. Multiple Regression
Estimated Demand Function for Frozen Pies
Sample line approximates population regression line ...
Standard Error of Estimate
SUMMARY OF STEPS FOR PERFORMING REGRESSION
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Author: Frederica Shockley
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