Stat 0302B Business Statistics Spring 2010-2011 Chapter VII Regression Analysis and Correlation § 7.1 IntroductionTerminology Explanation Regression Statistical technique of modelling the relationship between variables. Linear regression Study the straight-line relationship between variables – dependent variable and independent variable(s). Simple linear regression Linear regression with only one independent variable. Predicted variable (Dependent/Response) Variable whose value is unknown and its value is predicted by values of other variables. Predictor variable (Independent/Regressor) Variable whose value is known and its value is used to predict other variables. Usually this variable is known or can be controlled and thus assumed to be fixed quantities. Example 7.1Here are some examples of the use of simple linear regression: Dependent variable YIndependent variable XWeight Height Job performance Extent of training Returns on a stock Riskiness of the stock Mean weekly demand Price of automobile Overall GPA A-Level score Tree age (by C14) Tree age (by tree rings) P.147
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