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Chapter Summary

Correlation and Regression Explaining Association and Causation


Correlation and Regression are generally performed together. The application of correlation
analysis is to measure the degree of association between two sets of quantitative data. Correlation
is usually followed by the regression analysis. The main objective of regression Analysis is to the
variation in one variable which is called the dependable variable, based on the variation in one or
more other variable which is independent variable. If there is one dependable variable and one is
independent variable used to explain the variation in it, then the model is called the simple regression
model. If the multiple variables are used to explain the variation in dependent variable then it is
called multi regression model. Even though the form of the regression equation could be linear or
non-linear.
There are two Approaches to regression. First is A hit and trial Approach and the second is pre-
conceived approach. In Hit and trail approach, we collect data on a large number of independent
variables and then try to fir a regression model with a stepwise regression model, entering one
variable into the regression equation at a time while in Pre-Conceived Approach, the researcher
knows reasonably well which variables explain dependent variable and the model is pre-conceived.
The R2 value is percentage of the total variance in dependable variable, explained by all the
independent variables in the regression equation. The Hit and trail approach may be used for
exploratory research, but the serious decision making there has to be prior knowledge of the
variables which are likely to be affect Y (Dependable variable) and only such variables should be
used in the regression analysis.
Regression Equation:
Y = a+b1X1+b2X2+……+bnXn

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