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MBA (Business Analytics)
Submitted by:
Manokamna Kochar
What is regression analysis?
The basis for this is to find the relationship between the dependent and
independent variables. The value of dependent variable is of most importance
to researchers and depends on the value of other variables. Independent
variable is used to explain the variation in the dependent variable.
A1. The linear regression model is “linear in A5. Spherical errors: There is homoscedasticity and
parameters.” no auto-correlation
A2. There is a random sampling of observations. A6: Optional Assumption: Error terms should be
normally distributed.
First, we solve for the regression coefficient (b1): Once you have the regression equation, using it is a
b1 = Σ [ (xi - x)(yi - y) ] / Σ [ (xi - x)2] snap. Choose a value for the independent variable (x),
b1 = 470/730 perform the computation, and you have an estimated
b1 = 0.644 value (ŷ) for the dependent variable.
Once we know the value of the regression coefficient In our example, the independent variable is the student's
(b1), we can solve for the regression slope (b0): score on the aptitude test. The dependent variable is the
b0 = y - b1 * x student's statistics grade. If a student made an 80 on the
b0 = 77 - (0.644)(78) aptitude test, the estimated statistics grade (ŷ) would be:
b0 = 26.768 ŷ = b0 + b1x
Therefore, the regression equation is: ŷ = 26.768 + 0.644x = 26.768 + 0.644 * 80
ŷ = 26.768 + 0.644x . ŷ = 26.768 + 51.52 = 78.288
Thankyou