MGMT 2340 Section W01 Business Statistics I Instructor: E. Mark Leany contact via Blackboard online.uen.org alternately: [email protected] Chapter 13 Linear Regression and Correlation 444
GOALS 1. Understand and interpret the terms dependent and independent variable . 2. Calculate and interpret the coefficient of correlation , the coefficient of determination , and the standard error of estimate . 3. Conduct a test of hypothesis to determine whether the coefficient of correlation in the population is zero. 4. Calculate the least squares regression line. 5. Construct and interpret confidence and prediction intervals for the dependent variable. 444 Regression Analysis - Introduction z Chapter 4 - idea of showing the relationship between two variables with a scatter diagram was introduced. z Example: As the age of the buyer increased, the amount spent for the vehicle also increased. z Correlation: Numerical measures to express the strength of relationship between two variables are developed. z Regression: An equation is used to express the relationship between variables, allowing us to estimate one variable on the basis of another. 456
Regression Analysis - Examples 1.Is there a relationship between the amount Healthtexspends per month on advertising and its sales in the month? 2.Can we base an estimate of the cost to heat a home in January on the number of square feet in the home? 3.Is there a relationship between the miles per gallon achieved by large pickup trucks and the size of the engine? 4.Is there a relationship between the number of hours that students studied for an exam and the score earned?
Scatter Plot and the Related Coefficient of Correlation (Ex. 4)r = 0.80012345012345Correlation Coefficient - ExampleUsing the Copier Sales of America data