Lecture7-2

Lecture7-2 - BUAD 310 Applied Business Statistics...

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BUAD 310 Applied Business Statistics 2/24/10
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Relationships between Variables So far we have done statistics on one variable at a time (estimation and testing). We are now interested in relationship between two variables and how to use one variable to predict another variable. E.g., the advertising and sale: ( Description ) How sale depends on advertising expenditure? ( Control ) How much to spend on advertising to reach certain goal on sale? ( Prediction ) How much sale do we expect if we spend certain amount of money on advertising? 2
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Response and Explanatory Variables Response variable : the variable of interest (measures the outcome of a study); also called dependent variable . Explanatory variable : a variable that explains or causes changes in the response variable; also called independent variable . E.g., the sale (response) and advertising (explanatory) 3
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Scatterplot 4 Shows the relationship between two quantitative variables measured on the same individuals (how one variable moves as the other variable moves). The values of one variable --> horizontal axis The values of the other variable --> vertical axis Each individual appears as a point in the plot Explanatory variable (if there is one) --> horizontal axis, Response --> vertical axis Note : To add a categorical variable to the scatterplot, use a different color or symbol for each category.
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Scatterplot 5 Scatterplot of Weight versus (against) Height
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Scatterplot with Groups 6 Scatterplot of Weight versus (against) Height
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This note was uploaded on 09/05/2010 for the course BUAD 310 taught by Professor Lv during the Spring '07 term at USC.

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Lecture7-2 - BUAD 310 Applied Business Statistics...

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