LECTURE NOTES by DR. J.S.V.R.

KRISHNA PRASAD
------------------------------------------------------------------------

.
REGRESSION

e
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Definition:
Regression is the measure of the average relationship

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between two or more variables in terms of the original units of the
data.

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Types Of Regression:
The regression analysis can be classified into:
a) Simple and Multiple

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b) Linear and Non –Linear
c) Total and Partial
Linear Regression Equation:
s,
If two variables have linear relationship then as the
independent variable (X) changes, the dependent variable (Y) also
th

changes. If the different values of X and Y are plotted, then the two
straight lines of best fit can be made to pass through the plotted
points. These two lines are known as regression lines. Again, these
ma

regression lines are based on two equations known as regression

equations. These equations show best estimate of one variable for
the known value of the other. The equations are linear.
of

Linear regression equation of Y on X is

Y = a + bX …… . (1)
And X on Y is
X = a + bY… ….(2)
.

a, b are constants.
pt

From (1) We can estimate Y for known value of X.

(2) We can estimate X for known value of Y.
De

M.Sc.- PAGE -01

 LECTURE NOTES by DR. J.S.V.R. KRISHNA PRASAD
------------------------------------------------------------------------

e .
eg
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Dependent Variable
The variable whose value is to be predicted for a given
independent variable(s) is called dependent variable, denoted by

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Y. For example, if advertising (X) and sales (Y) are correlated, we
could estimate the expected sales (Y) for given advertising
expenditure (X). So in this case Y is a dependent variable.
Independent Variable
s,
The variable which is used for prediction is called an
independent variable. For example, it is possible to estimate the
th

required amount of expenditure (X) for attaining a given amount of

sales (Y), when X and Y are correlated. So in this case Y is
ma

independent variable. There can be more than one independent

variable in regression.
The line of regression is the line which gives the best estimate
of

to the value of one variable for any specific value of the other
variable.
Thus the line of Regression is the line of best fit and is
.

obtained by the principle of least squares. . The equation

corresponds to the line of regression is also referred to as
pt

regression equation.
Two Regression Lines
De

For the pair of values of (X, Y), where X is an independent

variable and Y is the dependent variable the line of regression of Y
on X is given by
Y − Y = byx (X − X )
where byx is the regression co-efficient of Y on X and given
σ
by byx = r . y , where r is the correlation co-efficient between X
σx
and Y and σx and σy are the standard deviations of X and Y
respectively.

∴ byx = Σ xy2 where x = X − X and y = Y − Y

Σx
163

M.Sc.- PAGE -02

 LECTURE NOTES by DR. J.S.V.R. KRISHNA PRASAD
------------------------------------------------------------------------

e .
eg
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Similarly when Y is treated as an independent variable and
X as dependent variable, the line of regression of X on Y is given by
(X − X ) = bxy (Y − Y )

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σ
where bxy == r x = Σ xy2 here x = X − X ; y = Y − Y
σy Σy
Note
s,
The two regression equations are not reversible or
interchangeable because of the simple reason that the basis and
th

assumption for deriving these equations are quite different.

Example 1:
ma

Calculate the regression equation of X on Y from the

following data.
X : 10 12 13 12 16 15
of

Y : 40 38 43 45 37 43
Solution :
X Y x =X− X y=Y− Y x2 y2 xy
.
pt

10 40 -3 -1 9 1 3
12 38 -1 -3 1 9 3
De

13 43 0 2 0 4 0
12 45 -1 4 1 16 -4
16 37 3 -4 9 16 -12
15 43 2 2 4 4 4
78 246 0 0 24 50 6
ΣX 78 ΣY 246
X = n = 6 = 13 Y = n = 6 = 41
Σxy − 6
bxy = = = −0.12
Σy 2 50
∴ Regression equation of X on Y is (X − X ) = bxy (Y − Y )
X − 13 = −0.12 (Y − 41) ⇒ X = 17.92 − 0.12Y

M.Sc.- PAGE -03

 LECTURE NOTES by DR. J.S.V.R. KRISHNA PRASAD
------------------------------------------------------------------------

e .
REGRESSION COEFFECIENTS:

eg
ll
σy
The regression equation of Y on X is ye = y + r ( x − x)
σx

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Here, the regression Co.efficient of Y on X is
σ
b1 = byx = r y
σx

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ye = y + b1 ( x − x)
The regression equation of X on Y is
σ
s,
X e = x + r x ( y − y)
σy
th

Here, the regression Co-efficient of X on Y

σ
b2 = bxy = r x
σy
ma

X e = X + b2 ( y − y )
of

Note: 1. If y values is to be estimated , take regression

equation y on x. Here, y is dependent variable and x is
independent variable.
.
pt

Note: 2. If x value is to be estimated , take regression

De

equation x on y. Here, x is dependent variable and y is

independent variable.

M.Sc.- PAGE -04

 LECTURE NOTES by DR. J.S.V.R. KRISHNA PRASAD
------------------------------------------------------------------------
If the deviation are taken from respective means of x and y
∑ ( X − X )(Y − Y ) ∑ xy

.
b1 = byx = = and
∑ (X − X ) ∑x

e
2 2

eg
b2 = bxy = ∑ ( X − X )(Y − Y ) =∑
xy
∑ (Y − Y ) ∑y 2

ll
2

where x = X − X , y = Y − Y

Co
If the deviations are taken from any arbitrary values of x and y
(short – cut method)

b1 = byx = ∑
n uv − ∑ u ∑ v

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n∑ u 2 − ( ∑ u )
2

n ∑ uv − ∑ u ∑ v
s,
b2 = bxy =
n∑ v 2 − ( ∑ v )
2
th

where u = x – A : v = Y-B
A = any value in X
ma

B = any value in Y
Properties of Regression Co-efficient:
1. Both regression coefficients must have the same sign, ie either
of

they will be positive or negative.

2. correlation coefficient is the geometric mean of the regression
coefficients ie, r = ± b1b2
.

3. The correlation coefficient will have the same sign as that of the
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regression coefficients.
4. If one regression coefficient is greater than unity, then other
regression coefficient must be less than unity.
De

5. Regression coefficients are independent of origin but not of

scale.
6. Arithmetic mean of b1 and b2 is equal to or greater than the
b1 + b2
coefficient of correlation. Symbolically ≥r
2

M.Sc.- PAGE -05

 LECTURE NOTES by DR. J.S.V.R. KRISHNA PRASAD
------------------------------------------------------------------------
7. If r=0, the variables are uncorrelated , the lines of regression

.
become perpendicular to each other.
8. If r= +1, the two lines of regression either coincide or parallel to

e
each other

eg
 m − m2 
9. Angle between the two regression lines is θ = tan-1  1 
1 + m1m2 

ll
where m1 and,m2 are the slopes of the regression lines X on Y
and Y on X respectively.

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10.The angle between the regression lines indicates the degree of
dependence between the variables.
Example 2:

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4 9
If 2 regression coefficients are b1= and b2 = .What would be
5 20
the value of r?
s,
Solution:
The correlation coefficient , r = ± b1b2
th

4 9
= x
5 20
ma

36 6
= = = 0.6
100 10
Example 3:
of

15 3
Given b1 = and b2 = , Find r
8 5
Solution:
.

r = ± b1b2
pt

15 3
= x
De

8 5
9
= =1.06
8
It is not possible since r, cannot be greater than one. So the given
values are wrong

M.Sc.- PAGE -06

 LECTURE NOTES by DR. J.S.V.R. KRISHNA PRASAD
------------------------------------------------------------------------
Why there are two regression equations?

.
The regression equation of Y on X is
σ

e
Ye = Y + r y ( X − X )
σx

eg
(1)
(or)
Ye = Y + b1 ( X − X )

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The regression equation of X on Y is
σ

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X e = X + r x (Y − Y )
σy
X e = X + b2 (Y − Y )

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These two regression equations represent entirely two
different lines. In other words, equation (1) is a function of X,
which can be written as Ye = F(X) and equation (2) is a function of
s,
Y, which can be written as Xe = F(Y).
The variables X and Y are not inter changeable. It is mainly
due to the fact that in equation (1) Y is the dependent variable, X is
th

the independent variable. That is to say for the given values of X

we can find the estimates of Ye of Y only from equation (1).
ma

Similarly, the estimates Xe of X for the values of Y can be obtained

only from equation (2).
Example 4:
of

Compute the two regression equations from the following data.

X 1 2 3 4 5
Y 2 3 5 4 6
If x =2.5, what will be the value of y?
.

Solution:
pt

X Y x = X − X y = Y −Y x2 y2 xy
1 2 -2 -2 4 4 4
De

2 3 -1 -1 1 1 -1
3 5 0 1 0 1 0
4 4 1 0 1 0 0
5 6 2 2 4 4 4
15 20 20 10 10 9

M.Sc.- PAGE -07

 LECTURE NOTES by DR. J.S.V.R. KRISHNA PRASAD
------------------------------------------------------------------------
∑ X 15
X= = =3

.
n 5
∑ Y 20

e
Y= = =4

eg
n 5
Regression Co efficient of Y on X
∑ xy 9

ll
byx = = = 0.9
∑ x 2 10

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Hence regression equation of Y on X is
Y = Y + byx ( X − X )
= 4 + 0.9 ( X – 3 )

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= 4 + 0.9X – 2.7
=1.3 + 0.9X
when X = 2.5
s,
Y = 1.3 + 0.9 × 2.5
= 3.55
Regression co efficient of X on Y
th

∑ xy 9
bxy = = = 0.9
∑ y 2 10
ma

So, regression equation of X on Y is

X = X + bxy (Y − Y )
of

= 3 + 0.9 ( Y – 4 )
= 3 + 0.9Y – 3.6
= 0.9Y - 0.6
.

Short-cut method
pt

Example 5:
Obtain the equations of the two lines of regression for the data
De

given below:

X 45 42 44 43 41 45 43 40
Y 40 38 36 35 38 39 37 41

M.Sc.- PAGE -08

 LECTURE NOTES by DR. J.S.V.R. KRISHNA PRASAD
------------------------------------------------------------------------
Solution:
u2 V2

.
X Y u = X-A v = Y-B uv
46 40 3 9 2 4 6

e
42 38 B -1 1 0 0 0

eg
44 36 1 1 -2 4 -2
A 43 35 0 0 -3 9 0

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41 38 -2 4 0 0 0
45 39 2 4 1 1 2

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43 37 0 0 -1 1 0
40 41 -3 9 3 9 -9
0 28 0 28 -3
∑u

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X = A+
n
0
= 43 + = 43
8
s,
∑u
Y = B+
n
th

0
= 38 + = 38
8
ma

The regression Co-efficient of Y on X is

b1 = byx = ∑
n uv − ∑ u ∑ v
n∑ u 2 − ( ∑ u )
2
of

8(−3) − (0)(0) −24

= = = -0.11
8(28) − (0) 2
224
.

The regression coefficient of X on Y is

b2 = bxy = ∑
n uv − ∑ u ∑ v
pt

n∑ v 2 − ( ∑ v )
2
De

8(−3) − (0)(0)
=
8(28) − (0) 2
−24
= = - 0.11
224

M.Sc.- PAGE -09

 LECTURE NOTES by DR. J.S.V.R. KRISHNA PRASAD
------------------------------------------------------------------------
Hence the reression equation of Y on X is

.
Ye = Y + b1 ( X − X )

e
= 38 – 0.11 (X-43)

eg
= 38 – 0.11X + 4.73
= 42.73 – 0.11X
The regression equation of X on Y is

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X e = X + b1 (Y − Y )
= 43 – 0.11 (Y-38)

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= 43 – 0.11Y + 4.18
= 47.18 – 0.11Y
Example 6:

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In a correlation study, the following values are obtained

X Y
s,
Mean 65 67
S.D 2.5 3.5
th

Co-efficient of correlation = 0.8

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Find the two regression equations that are associated with the
above values.
Solution:
of

Given,
X = 65, Y = 67, σx = 2.5, σy= 3.5, r = 0.8
The regression co-efficient of Y on X is
.

σ
byx= b1 = r y
pt

σx
3.5
De

= 0.8 × = 1.12
2.5
The regression coefficient of X on Y is
σ
bxy = b2 = r x
σy

M.Sc.- PAGE -10

 LECTURE NOTES by DR. J.S.V.R. KRISHNA PRASAD
------------------------------------------------------------------------
2.5
= 0.8 × = 0.57

.
3.5

e
Hence, the regression equation of Y on X is
Ye = Y + b1 ( X − X )

eg
= 67 + 1.12 (X-65)

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= 67 + 1.12 X - 72.8
= 1.12X – 5.8
The regression equation of X on Y is

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X e = X + b2 (Y − Y )
= 65 + 0.57 (Y-67)
= 65 + 0.57Y – 38.19

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= 26.81 + 0.57Y
Note:
Suppose, we are given two regression equations and we
s,
have not been mentioned the regression equations of Y on X and X
on Y. To identify, always assume that the first equation is Y on X
th

then calculate the regression co-efficient byx = b1 and bxy = b2. If

these two are satisfied the properties of regression co-efficient, our
assumption is correct, otherwise interchange these two equations.
ma

Example 7:
Given 8X – 10Y + 66 = 0 and 40X – 18Y = 214. Find the
of

correlation coefficient, r.
Solution:
.

Assume that the regression equation of Y on X is

8X- 10Y + 66 = 0.
pt

-10Y = -66-8X
10Y = 66 + 8X
De

66 8 X
Y= +
10 10
Now the coefficient attached with X is byx
8 4
i.e., byx = =
10 5

M.Sc.- PAGE -11

 LECTURE NOTES by DR. J.S.V.R. KRISHNA PRASAD
------------------------------------------------------------------------
The regression equation of X on Y is

.
40X-18Y=214

e
In this keeping X left side and write other things right side

eg
i.e., 40X = 214 + 18Y
214 18

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i.e., X = + Y
40 40

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Now, the coefficient attached with Y is bxy

18 9
i.e., bxy = =
40 20

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Here byx and bxy are satisfied the properties of regression
coefficients, so our assumption is correct.
Correlation Coefficient, r = b yx b xy
s,
4 9
= ×
th

5 20
36
=
ma

100
6
=
10
of

= 0.6
Example 8:
Regression equations of two correlated variables X and Y
.

are 5X-6Y+90 = 0 and 15X-8Y-130 = 0. Find correlation

pt

coefficient.
De

Solution:
Let 5X-6Y+90 =0 represents the regression equation of X
on Y and other for Y on X
6 90
Now X= Y –
5 5

M.Sc.- PAGE -12

 6
bxy = b2 =

.
5

e
For 15X-8Y-130 = 0
15 130

eg
Y= X–
8 8
byx = b1

ll
15
=
8

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r = ± b1 b2
15 6
= ×

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8 5
= 2.25
= 1.5 >1
s,
It is not possible. So our assumption is wrong. So let us take the
first equation as Y on X and second equation as X on Y.
From the equation 5x – 6y + 90 = 0,
th

5 90
Y= X –
6 6
ma

5
byx =
6
From the equation 15x - 8y – 130 = 0,
of

8 130
X= Y+
15 15
8
bxy =
.

15
pt

Correlation coefficient, r = ± b1 b2
5 8
De

= ×
6 15
40
=
90
2
= = 0.67
3

M.Sc.- PAGE -13

 .
Example 9:

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The lines of regression of Y on X and X on Y are
respectively, y = x + 5 and 16X = 9Y – 94. Find the variance of X
if the variance of Y is 19. Also find the covariance of X and Y.

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Solution:

Co
From regression line Y on X,
Y = X+5
We get byx = 1
From regression line X on Y,

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16X = 9Y-94
9 94
X= Y– ,
16 16
s,
we get
9
bxy =
th

16
r = ± b1 b2
ma

9
= 1×
16
3
of

=
4
σy
Again , byx = r
σx
.

3 4
pt

i.e., 1 = × (Since σ Y 2=16, σY = 4 )

4 x
σX = 3.
De

Variance of X = σX2

=9 cov( x, y )
1 =
cov( x, y ) 9
Again byx =
x
2 or cov (x,y) = 9.

M.Sc.- PAGE -14

 e .
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Co
Example 10
Marks obtained by 10 students in Economics and
Statistics are given below.

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Marks in Economics : 25 28 35 32 31 36 29 38 34 32
Marks in Statistics : 43 46 49 41 36 32 31 30 33 39
Find (i) the regression equation of Y on X
s,
(ii) estimate the marks in statistics when the marks
in Economics is 30.
th

Solution :
Let the marks in Economics be denoted by X and statistics
ma

by Y.
X Y x =X− X y=Y− Y x2 y2 xy
25 43 -7 5 49 25 -35
of

28 46 -4 8 16 64 32
35 49 3 11 9 121 33
32 41 0 3 0 9 0
.

31 36 -1 -2 1 4 2
36 32 4 -6 16 36 -24
pt

29 31 -3 -7 9 49 21
38 30 6 -8 36 64 -48
De

34 33 2 -5 4 25 -10
32 39 0 1 0 1 0
320 380 0 0 140 398 -93
ΣX 320 ΣY 380
X = n = 10 = 32 Y = n = 10 = 38
Σ xy − 93
byx = = = −0.664
Σx 2 140
(i) Regression equation of Y on X is
Y − Y = byx (X − X )
Y − 38 = −0.664 (X − 32)
⇒ Y = 59.25 − 0.664X

(ii) To estimate the marks in statistics (Y) for a given marks in the
Economics (X), put X = 30, in the above equation we get,
Y = 59.25 − 0.664(30)
= 59.25 − 19.92 = 39.33 or 39

M.Sc.- PAGE -15

 e .
eg
Example 11:

ll
Is it possible for two regression lines to be as follows:
Y = -1.5X + 7 , X = 0.6Y + 9 ? Give reasons.

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Solution:
The regression coefficient of Y on X is b1 = byx = -1.5
The regression coefficient of X on Y is b2 = bxy = 0.6
Both the regression coefficients are of different sign, which is a

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contrary. So the given equations cannot be regression lines.

Example 12:
s,
In the estimation of regression equation of two variables X
and Y the following results were obtained.
th

X = 90, Y = 70, n = 10, x2 =6360; y2 = 2860,

xy = 3900 Obtain the two regression equations.
ma

Solution:
Here, x, y are the deviations from the Arithmetic mean.
Σxy
b1 = byx =
Σx 2
of

3900
= = 0.61
6360
Σxy
.

b2 = bxy = 2
Σy
pt

3900
= = 1.36
De

2860
Regression equation of Y on X is
Ye = Y +b1 (X - X )
= 70 + 0.61 (X –90)
= 70 + 0.61 X – 54.90
= 15.1 + 0.61X
Regression equation of X on Y is
Xe = X + b2 (Y-Y )
= 90 + 1.36 (Y –70)
= 90 + 1.36 Y – 95.2 = 1.36Y – 5.2

M.Sc.- PAGE -16

 e .
eg
ll
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HOHH3 3'I8V8OHd
s111 qagqm 01 xu:-nxa sq; pug 01 s1 de1s xxau
aq1 ‘1ua1og;:->00 u011e1a110o sq; 10 911112/1
10 c-unsesux p10 ue s1 (1)-3'4 /(q peuouep /(uensn sq; upnduloo 19111;;

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‘zuogoggz->00 uo1112[911o:> 10 10119 a[q1zqo1d
9111 uodn spu:-ad:->p 11 se 12; os ug
'a1qepued:;p
1us1:>g;9oa u01uz[a110o 10 enpz/\ pa/uesqo un
10 ,(1111qe1[91 sq; 3u11sa1
"ugldunzs u10pue1 10 suoggpuoo
‘1011a pmpums s11 uaq1 suo11eA1:-asqo 10 s112d
u 10 e[du1es 2 ug wagaggaoza uo11e1a11oo peussqo
sup s11 31
s,
'g'g Kq [JQIOUQP /(uensn (1) s1 Kq uazq :

1
(OI 8)
S E1 (1) Z-3:-T
. . _ U
th

10 10119 a[q1zq01d 9111 1ua1og1aoo uo11e[Q11o:> s1 /(q U9/Q3 :

- 5
xample8-20.(a)indKarlPearson’scoeffic
""""' of correlation from
ma

the following series of marks

secured by 10 students in a class test in Mathematics and Statistics
:
Marks in Mathematics. : 45 70 65 30 90 ~
40 50 75 85 60
Marks in Statistics : 35 90 70 40 95 40 60 80 80 50
Also calculate its probable error. Assume 60 and 65 as working means.
of

(b) Hence discuss if the value of r is signicant or not. Also compute

the limits within which the
population correlation coeicient may be expected to lie. '

Solution. (a) Let the marks in mathematics be denoted by the variable

X and the marks in statistics by
the variable Y. It may be noted that we can take out the factor
.

5 common in each of the X and Y series.

Hence, it will be convenient to change the scale also. Taking 60
and 65 as working means for X and Y series
pt

respectively, let us take :

(I 1'8)
u=
'3'd X?“-) SVL9'0 = (4)
and
'.':TS X
v= 5%= (1) (F_l\—I§ SV/.9'0
De

J
u

sq; Suppn 10; u0se91 §17L9-() 10192; CALCULATIONS FOR CORRELATION COEFFICIENT
12111 s1
10 %()g u011nq111s1p leuuou 2 Ll} 9111 suo11eA1:-asqo Q11 u1
sq;
We have :
1 Tl §17L9-() up s1 11 1-uaqm ‘0 um:->111 pun ,0 s1 72': sq;
9111 9‘3un1
pappvfr
nZuv — (Zu)(Zv) zunoum uv s_1 1ua_1og£[aoo u0_z1n1a110a aqzfo 10112 a1qnq01d 11011144 01
‘1s_z1aag 01 8u_1p109aV
uaaa 210 saaump am 1/agqm u_n11_m sumoum saanpo1d 45 35 2111,,
— —

‘/ [H2142 — (Zu)2]
HD2111 aqz u1o1fpa1on11qns pun
>< [nZv2 — (Zv)2]
‘1ua_zog,ffa0o u0_uv;a1109
70 90
zu01f uo_z1v1a1109f0 Juapgaoo 0122111
l0><l4l—2><(—2)
']1vf11_1m u10puv1 10 P2199198 s2_112s 1; -
H 4 25 A 1 10\
65 70 1 1 1
_ -
3° 40 "
1414
1/l396>< l756 40 40 _ _
=> log r = log 1414-§[log
1

1396 + log 1756]»;

50 60 -
75 80
= 3-1504 -% [3-1449 + 3-2445]
= 3-1504 - ;>< 6-3894
= 3-1504 — 3-1947 = — O-0443 = 1-9557 Total: 2 -2 140 176 141
=>_ r = Antilog (I-9557) = O-9031 = O~9
rxy = ruv Z 0-9.
Probable Error of Correlation Coefficient is given by :

P.E. (r) = 0-6745 % = = = 0-0405.

Standard errors: The standard errors of estimate are given by:

 rx 2 1
S xy  Sxxy 1 yx  
r 2 Sand
and 1ry 2 1 r 2
Syyx 
S xy   x 1 r 2 and S yx   y 1 r 2

M.Sc.- PAGE -17

 V " l
Example 9-23. Calculate the standard error of the estimate of Y from the regression of Y on X for the

.
following data :

e
n=10, Ey2=90, Xxy=120, Ex2=200 ...(*)

eg
where x=X—X, y=Y—Y. -
[Delhi Univ.iB.A. (Econ. Hons. ), I991]

ll
Solution. The standard error of the estimate of Y from the regression of Y on X is given by : ‘
S»<=<ry<1-r*>'/2; r=r<X. o .-.<**>

Co
cf =§2<Y-?>2=§2y"=%=9 [Fwm<*>1 => <:,=45 =3 '

_r(Xn_ z<X- X><Y-Y) zxy

Z(X _""2

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X) -Z( y__—
Y) 2 \/Zx1.Zy2
120 120 120 2 [Usingm]
\I9o><20o \l5><360O sod? ~13
s,
Substituting in (**), we get '

S]/X =3'\il—% = = §~/E = 0-6><2-236=1-3416.

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Example 9-24. In fitting of a regression of Y on X to a bivariate distribution consisting of 9

observations, the explained and unexplained variations were computed as 24 and 36 respectively. Find
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(i) the coeicient of determination and (ii) standard error of the estimate of Y on X. H

[Delhi Univ. B.A. (Econ. Hons.), 1997]

' Solution. (i) In the usual notations, we are given
of

n = 9, Explained Variation = 24 ; Unexplained_Variation = 36

Total Variation Explained Variation + Unexplained Variation = 2Z1\+ 36 = 60
=

Z(y—§)2=60 = <»,’=f;>2<y-§>2=°e°=’33
.

Coefcient of determination (r2) is given by :

pt

Ex lained Variation 21
, r2 _ Total Variation _ 6° _ 0 4
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(ii) The standard error (S.E.) of the estimate of Y on X, denoted by Sy, is given by :

_ - = - 7'2)
-= —_.;~(1- )= 23£x06= =2.
Example 9-25. In a partially destroyed record, for the estimation of the two lines of regression from a
bivariate data (X, Y), the following results were available :
Coeicient of regression of Y on X = -1 -6
Coeicient of regression of X on Y = 0-4 -
Standard error of the estimate of Y on X = 3

M.Sc.- PAGE -18

 e .
eg
Example 9-11. By using the following data, nd out the two line of regression and from them compute

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the Karl Pearson ’s coeicient of correlation.
EX = 250; ZY = 300 ; ZXY= 7,900 ; ZX2 = 6,500 ; ZY2 = 10,000 ; and N = 10.

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Solution. We have :

—_ZX_2so_
x_-X,-_;5_25 ,
—_ZY_300_
Y_~A7_W_30
NZXY— (EX) (ZY)
byx = Coefcient of regression of Y on X =

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N EX’ — (ZX)2
_1o><790o-2so><3oo_ 79060-75o00_400o_1_6
10 X 6500

WW
(250)2 65000 — 62509 2500

. . . N ZXY — (EX) (EY)

s,
bxy = Coefficient of regression of X on Y=
l0><7900—250><300_ 79000-75000 4000 O4
10X 1()0()()_(3Q())1 l00000—90000 10000
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Hence correlation coefcient rxy between X and Y is given by :

I'Xy2 =byX.bXy:l'6X0'4=0'64 3 rXy=i

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Since the regression coefficients are positive, we take r = + 0-8.

Regression Equations Y‘

Regression equation of Y on X Regression equation of X on Y

Y-Y =b,,,(x-Y) X-X
of

=bXy(Y-Y)
=> Y-30 =1-6(X—25) => X—25 =0-4(Y-30)
= 'Y =1-6X—40+30 => Xv=0-4Y-12+25
--.> Y=1-6X-10 => X=0-4Y+l3
.

Example 9'12. In the estimation of regression equations of two variables X and Y the following results
pt

were obtained : '

Y = 90, 7 = 70, n = 10 ; Z x2 = 6360, Z y2 = 2860, )3 xy = 3900,

where x and y are deviations from respective means. Obtain the two equations.
De

M.Sc.- PAGE -19

 Uses of Regression Analysis:

.
1. Regression analysis helps in establishing a functional

e
relationship between two or more variables.

eg
2. Since most of the problems of economic analysis are based on
cause and effect relationships, the regression analysis is a highly

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valuable tool in economic and business research.
3. Regression analysis predicts the values of dependent variables
from the values of independent variables.

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4. We can calculate coefficient of correlation ( r) and coefficient of
determination ( r2) with the help of regression coefficients.
5. In statistical analysis of demand curves, supply curves,

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production function, cost function, consumption function etc.,
regression analysis is widely used.
9.8 Difference between Correlation and Regression:
s,
S.No Correlation Regression
1. Correlation is the relationship Regression means
between two or more variables, going back and it is a
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which vary in sympathy with the mathematical measure

other in the same or the opposite showing the average
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direction. relationship between

two variables
2. Both the variables X and Y are Here X is a random
random variables variable and Y is a
of

fixed variable.
Sometimes both the
variables may be
.

random variables.
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3. It finds out the degree of It indicates the causes

relationship between two and effect relationship
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variables and not the cause and between the variables

effect of the variables. and establishes
functional relationship.

M.Sc.- PAGE -20

4. It is used for testing and Besides verification it

.
verifying the relation between is used for the
two variables and gives limited prediction of one

e
information. value, in relationship

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to the other given
value.

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5. The coefficient of correlation is Regression coefficient
a relative measure. The range of is an absolute figure. If

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relationship lies between –1 and we know the value of
+1 the independent
variable, we can find
the value of the

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dependent variable.
6. There may be spurious In regression there is
correlation between two no such spurious
s,
variables. regression.
7. It has limited application, It has wider
because it is confined only to application, as it
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linear relationship between the studies linear and non-

variables. linear relationship
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between the variables.

8. It is not very useful for further It is widely used for
mathematical treatment. further mathematical
of

treatment.
9. If the coefficient of correlation is The regression
positive, then the two variables coefficient explains
are positively correlated and that the decrease in one
.

vice-versa. variable is associated

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with the increase in the

other variable.
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Exercise
I. Choose the correct answer:
1. When the correlation coefficient r = +1, then the two regression
lines
a) are perpendicular to each other b) coincide
c) are parallel to each other d) none of these

M.Sc.- PAGE -21

2. If one regression coefficient is greater than unity then the

.
other must be
a) greater than unity b) equal to unity

e
c) less than unity d) none of these

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3. Regression equation is also named as
a) predication equation b) estimating equation

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c) line of average relationship d) all the above
4. The lines of regression intersect at the point

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a) (X,Y) b) ( X , Y ) c) (0,0) d) (1,1)
5. If r = 0, the lines of regression are
a) coincide b) perpendicular to each other
c) parallel to each other d) none of the above

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6. Regression coefficient is independent of
a) origin b) scale c)both origin and scale
d) neither origin nor scale.
s,
7. The geometric mean of the two-regression coefficients byx
and bxy is equal to
b) r2
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a) r c) 1 d) r
8. Given the two lines of regression as 3X – 4Y +8 = 0 and
4X – 3Y = 1, the means of X and Y are
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a) X = 4, Y = 5 b) X =3, Y = 4
c) X = 2, Y = 2 d) X = 4/3, Y = 5/3
9. If the two lines of regression are
of

X + 2Y – 5 = 0 and
2X + 3Y – 8 = 0, the means of X and Y are
a) X = -3, Y = 4 b) X = 2, Y = 4
c) X =1, Y = 2 d) X = -1, Y = 2
.

10. If byx = -3/2, bxy = -3/2 then the correlation coefficient, r is

pt

a) 3/2 b) –3/2 c) 9/4 d) – 9/4

II. Fill in the blanks:
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11. The regression analysis measures ________________

between X and Y.
12. The purpose of regression is to study ________ between
variables.
13. If one of the regression coefficients is ________ unity, the other
must be _______ unity.
238
M.Sc.- PAGE -22
14. The farther the two regression lines cut each other, the _____

.
be the degree of correlation.
15. When one regression coefficient is positive, the other would

e
also be _____.

eg
16. The sign of regression coefficient is ____ as that of correlation
coefficient.

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III. Answer the following:
17. Define regression and write down the two regression

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equations
18. Describe different types of regression.
19. Explain principle of least squares.
20. Explain (i) graphic method, (ii) Algebraic method.

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21. What are regression co-efficient?
22. State the properties of regression coefficients.
23. Why there are two regression equations?
s,
24. What are the uses of regression analysis?
25. Distinguish between correlation and regression.
26. What do you mean by regression line of Y on X and
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regression line of X on Y?
27. From the following data, find the regression equation
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X = 21, Y = 20, X2 = 91, XY = 74, n = 7

28. From the following data find the regression equation of Y on
X. If X = 15, find Y?
X 8 11 7 10 12 5 4 6
of

Y 11 30 25 44 38 25 20 27
29. Find the two regression equations from the following data.
X 25 22 28 26 35 20 22 40 20 18
.

Y 18 15 20 17 22 14 16 21 15 14
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30. Find S.D (Y), given that variance of X = 36, bxy = 0.8,
r = 0.5
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31. In a correlation study, the following values are obtained

X Y
Mean 68 60
S.D. 2.5 3.5
Coefficient of correlation, r = 0.6 Find the two regression
equations.
239
M.Sc.- PAGE -23
32. In a correlation studies, the following values are obtained:

.
X Y
Mean 12 15

e
S.D. 2 3

eg
r = 0.5 Find the two regression equations.
33. The correlation coefficient of bivariate X and Y is r=0.6,

ll
variance of X and Y are respectively, 2.25 and 4.00, X =10,
Y =20. From the above data, find the two regression lines

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34. For the following lines of regression find the mean values of
X and Y and the two regression coefficients
8X-10Y+66=0

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40X-18Y=214
35. Given X=90, Y=70,bxy = 1.36, byx = 0.61
Find (i) the most probable values of X, when Y = 50 and
(ii) the coefficient of correlation between X and Y
s,
36. You are supplied with the following data:
4X-5Y+33 = 0 and 20X-9Y-107 = 0
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variance of Y = 4. Calculate
(I) Mean values of x and y
(II) S.D. of X
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(III) Correlation coefficients between X and Y.

Answers:
of

I. 1. b 2. c 3.d 4. b 5. b 6. a 7. a 8. a 9. c
10. b
II.
11. dependence 12. dependence 13. more than, less than
.

14. lesser 15. positive 16. same.

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III.
27. Y = 0.498X +1.366 28. Y =1.98X + 12.9;Y=42.6 30. 3.75
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31. Y=2.88 + 0.84X, X = 42.2 + 0.43Y

32. Y = 6 + 0.75X ; X = 7 + 0.33Y
33. Y= 0.8X + 12, X = 0.45Y +1
34. X =13, Y = 17 byx = 9/20, bxy = 4/5
35. (i) 62.8, (ii) 0.91
36. X =13, Y =17, S.D(X)=9, r = 0.6

M.Sc.- PAGE -24