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Unformatted text preview: written as Y = α + β X + u, Assume it is the true population model. Some terminologies In the above simple linear regression model, 1 α and β are regression coefficients (or parameters) to be estimated; they are unknown constants. α = intercept β = slope We typically refer to Y as the Dependent Variable,
Left-Hand Side Variable,
Explained Variable, or
Regressand. We typically refer to X as Independent Variable,
Right-Hand Side Variable,
What is u here? Example: Y=GPA, X=hours of study per week. GPA Study hours/week 3.5 25.0 2.0 10.0
2.2 12.0 3.5 15.0 2.5 20
… … Figure: A scatter plot of GPA and Study hours/week A coordinate system: good for displaying two variables on a single graph This graph is called a scatter plot. Note that the observations are not on a straight line! This means that X and Y do not have an exact or deterministic linear relationship (Imagine they do, 2 then once you have some data to estimate α and β , then you can predict the outco...
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