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Chapter 15 Notes

Chapter 15 Notes - Chapter 15 Multiple Regression Outline...

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Chapter 15 Multiple Regression Outline: Multiple Regression Model Least Squares Method Multiple Coefficient of Determination Model Assumptions Testing for Significance Using the Estimated Regression Equation for Estimation and Prediction Qualitative Independent Variables Residual Analysis The Multiple Regression Model: y = 0 + 1 x 1 + 2 x 2 + . . . + p x p + The Multiple Regression Equation: E( y ) = 0 + 1 x 1 + 2 x 2 + . . . + p x p The Estimated Multiple Regression Equation: = b 0 + b 1 x 1 + b 2 x 2 + . . . + b p x p The Least Squares Method : Least Squares Criterion: The formulas for the regression coefficients bo,b 1 b2, ••• bp involve the use of matrix algebra. We will rely on computer software packages to perform the calculations. • Interpretation of Coefficients
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bi represents an estimate of the change in y corresponding to a one-unit change in Xi when all other independent variables are held constant. The Multiple Coefficient of Determination: Relationship Among SST, SSR, SSE SST = SSR + SSE Multiple Coefficient of Determination R 2 = SSR/SST Adjusted Multiple Coefficient of Determination where n
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