Chapter 4 Part 2

# Chapter 4 Part 2 - Chapter 4 Part 2 Causual model using...

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Chapter 4 Part 2 Causual model using regression analysis o Procedure Identify variables that you think might explain what you are trying to forecast. Collect the data Initial Screening(check for problematic data) Build regression model and test( check that it meets necessary conditions) Use model to forecast Necessary Conditions for regression analysis o If the following assumptions are not satisfied, then corrective action must be taken or another method must be used. Linear relationship exists between independent variables and the dependent variable. Independent variables are not highly correlated Residuals( or errors) exhibit a constant variance Independent Residuals Normally Distributed residuals Linear Relationships o Two ways to check *** : plots with dependent variable on the y-axis against each independent variable on the x-axis. A plot should suggest a *** relationship.

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Chapter 4 Part 2 - Chapter 4 Part 2 Causual model using...

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