Stat 0302B
Business Statistics
Spring 2010-2011
Chapter VII
Regression Analysis and Correlation
§ 7.1
Introduction
Terminology
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 7.1
Here are some examples of the use of simple linear regression:
Dependent variable
Y
Independent variable
X
Weight
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 C
14
)
Tree age (by tree rings)
P.147

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