Regression Equations

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 Outline
Regression Equations
Finding out value of one variable with the help
of another known variable.
Standard Error

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 Regression Equations
• Regression Equations also known as
estimating equations are algebraic expressions
of the regression lines.
• Regression equation of Y on X
Y = a + bX
Where, “a” determines the intercept i.e. what
will be the value of Y when X is Zero.
Where “b” determines the slope of the line i.e.
change in Y per unit change in X.
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• Regression equation of X on Y
X= a + bY
Where, “a” determines the intercept i.e. what
will be the value of X when Y is Zero.
Where “b” determines the slope of the line i.e.
change in X per unit change in Y.
Now, the problem is how to find the values of “
a and b ”.
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• The answer to the question is provided by the
methods of Least Squares which states that the
line should be drawn through the points in such a
manner that the sum of the squares of the
deviations of the actual Y values from the
computed Y values is the least i.e. ∑(Y-Yc)2.
• BY the least squares method, two equations are
drawn:
• ∑Y=Na + b∑X
• ∑XY= a∑X + b ∑X2
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 X 6 2 10 4 8

Y 9 11 5 8 7

X Y XY X2 Y2

6 9 54 36 81

2 11 22 4 121

10 5 50 100 25

4 8 32 16 64

8 7 56 64 49

EX= 30 EY = 40 EXY = 214 EX2 = 220 EY2 = 340

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• ∑Y=Na + b∑X
• ∑XY= a∑X + b ∑X2
Substituting the values in the above equations:
40 = 5a +30b
214 = 30a + 220b
Multiplying eq 1 by 6, we get:240 = 30a + 180b
Solving both equations: b= -0.65, a = 11.9
Y on X: Y = 11.9 + 0.65X

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• ∑X = Na + b ∑Y
• ∑XY = a∑Y + b∑Y2
Again putting the values:
30 = 5a + 40b
214 = 40a + 340b

Multiplying
eq 1 by 8, we get: 240 = 40a + 350b
Solving both eq :b = -1.3, a = 16.4
X on Y: X= 16.4 -1.3Y
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• The method of Least square Method for finding regression equation is tedious
and involves a lot of calculations. Calculations can be simplified by taking
deviations of X and Y series from their respective means instead of using actual
values of X and Y.
• Regression Equation of X on Y:
X-𝑋 = r 𝜎𝑥 (Y - 𝑌)
𝜎𝑦
Where: r 𝜎𝑥 is regression coefficient of X onY(b𝙮𝙭)
𝜎𝑦
Where: : r 𝜎𝑥 = ∑xy
𝜎𝑦 ∑y2
Similiarly :

byx = ∑xy
∑y2

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 Calculate regression equations taking
deviations of items from the mean of X and Y
series
X (x-Mean) 𝒙2 Y (Y- y2 xy
x mean)y

6 0 0 9 +1 1 0

2 -4 16 11 +3 9 -12

10 +4 16 5 -3 9 -12

4 -2 4 8 0 0 0

8 +2 4 7 -1 1 -2

EX = 30 Ex= 0 E𝒙2 = 40 = 40 EY= 0 Ey2 Exy= -26

BBA 104 = 20 11
• 𝑋 = 30/5 = 6
• 𝑌= 40/5 = 8
X on Y : X-𝑋 = r 𝜎𝑥 (Y - 𝑌)
𝜎𝑦
r 𝜎𝑥 = ∑xy = -26 = -1.3
𝜎𝑦 ∑y2 20
X- 6= -1.3(Y-8)
X= -1.3Y + 16.4

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• Regression Equation of Y on X :
Y-𝑌 = r 𝜎𝑦 (X- 𝑋)
𝜎𝑥
r 𝜎𝑦 = ∑xy = -26 = -0.65
𝜎𝑥 ∑x2 40
Y-8 = -0.65(X-6)
Y-8 = -0.65x +3.9

Y= 11.9 -0.65X

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 Deviations from Assumed Mean
• When actual means of X and Y variables are in
fractions the calculations can be simplified by
taking the deviations from the assumed means.
• Regression equations are :
X-𝑋 = r 𝜎𝑥 (Y - 𝑌)
𝜎𝑦
Y-𝑌 = r 𝜎𝑦 (X - 𝑋)
𝜎𝑥

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Where:
r 𝜎𝑥 = N∑dxdy - ∑dx ∑dy
𝜎𝑦 N∑ dy2 - (∑dy)2

r 𝜎𝑦 = N∑dxdy - ∑dx ∑dy

𝜎𝑥 N∑ dx2 - (∑dx)2

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 Question
• Obtain regression equations taking deviations
from 5 in case of X and 7 in case of Y.

X 6 2 10 4 8

Y 9 11 5 8 7

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 X dx d x2 Y dy dy2 dxdy

6 +1 1 9 +2 4 +2

2 -3 9 11 +4 16 -12

10 +5 25 5 -2 4 -10

4 -1 1 8 +1 1 -1

8 +3 9 7 0 0 0

EX = 30 Edx = +5 Edx2= 45 EY= 40 Edy= 5 Edy2=25 Edxdy= -

21
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Regression Coefficient :
r 𝜎𝑥 = -21(5)-(5)(5)
𝜎𝑦 25(5)- (5)2
= -105-25
125-25
= -130/100
= -1.3
r 𝜎𝑦 = -21(5)- (5)(5)
𝜎𝑥 45(5)-(5)2
= -105-25
225-25

= -130/200
= -0.65

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𝑋= 30/5 =6 𝑌 = 40/5 = 8
Putting values of regression coefficient in
equations:
X-6 = -1.3(Y-8)
X-6= -1.3Y+ 10.4
X=16.4 -1.3Y

Y-8 = -0.65(X-6)
Y-8 = -0.65X+3.9
Y = 11.9 – 0.65X
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 Standard Error
• The standard error of the estimate is a
measure of the accuracy of predictions made
with a regression line. It measures the
dispersion about the average line known as
regression line. It presents the average
distance that the observed values fall from the
regression line. Conveniently, it tells you how
wrong the regression model is on average
using the units of the response variable..
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TThe smaller the value of standard error of
estimate , the closer will be the dots to the
regression line and the better the estimates
based on the equation for the line .
With the help of standard error of estimate it
is possible for us to ascertain how good and
representative the regression line is as a
description of the average relationship
between the two series.

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Regression Equation is more accurate in A
as compared to B. Hence better (lower) will
be the standard error of A as compared to
B.

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S = 𝑢𝑛𝑒𝑥𝑝𝑙𝑎𝑖𝑛𝑒𝑑 𝑉𝑎𝑟𝑖𝑎𝑡𝑖𝑜𝑛
yx
N
or Simplied Version are :

S =
yx ∑ 𝑌2 − 𝑎 ∑𝑌 − 𝑏∑𝑋𝑌
𝑁
S
xy = ∑ 𝑋2 − 𝑎 ∑𝑋 − 𝑏∑𝑋𝑌
𝑁

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 Question
• Obtain regression equations taking deviations
from 5 in case of X and 7 in case of Y.

X 6 2 10 4 8

Y 9 11 5 8 7

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X dx d x2 Y dy dy2 dxdy

6 +1 1 9 +2 4 +2

2 -3 9 11 +4 16 -12

10 +5 25 5 -2 4 -10

4 -1 1 8 +1 1 -1

8 +3 9 7 0 0 0

EX = 30 Edx = +5 Edx2= 45 EY= 40 Edy= 5 Edy2=25 Edxdy= -

21

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Regression Coefficient :
r 𝜎𝑥 = -21(5)-(5)(5)
𝜎𝑦 25(5)- (5)2
= -105-25
125-25
= -130/100
= -1.3
r 𝜎𝑦 = -21(5)- (5)(5)
𝜎𝑥 45(5)-(5)2
= -105-25
225-25

= -130/200
= -0.65

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𝑋= 30/5 =6 𝑌 = 40/5 = 8
Putting values of regression coefficient in
equations:
X-6 = -1.3(Y-8)
X-6= -1.3Y+ 10.4
X=16.4 -1.3Y

Y-8 = -0.65(X-6)
Y-8 = -0.65X+3.9
Y = 11.9 – 0.65X
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 From the regression equation we can find
following estimated values of both X and Y
X Y Y X (Y-Yc)2 (X-Xc)2
c c

6 9 8 4.7 1 1.69

2 11 10.6 2.1 0.16 0.01

10 5 5.4 9.9 0.16 0.01

4 8 9.3 6.0 1.69 4

8 7 6.7 7.3 0.09 0.49

EX = 30 EY=40 EYc=40 Exc=30 E=3.1 E= 6.20

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 3.1
• S
yx=
5
= 0.62
= 0.787

S 6.2
xy =
5
= 1.24
= 1.114

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 Properties of Regression
Coefficient
• The product of the two regression coefficient will never
exceed one.
• r= 𝑏𝑦𝑥 ∗ 𝑏𝑥𝑦
• Both the regression coefficients will always have the same
algebraic signs.
• Regression coefficient are independent of origin but not of
scale.
• If any regression coefficients is greater than unity , the
other must be less than unity. Such that byx*bxy=r2 < 1

• Correlation coefficient and regression coefficients also have

the same algebraic signs.

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 Limitations & Pitfalls in
Regression Analysis
• Relationship shown by scatter diagram may
not be the same if the equation is extended
beyond the values used in computing the
equations.
• It is important to note that assumptions made
about the relationship must not change while
computing regression equations.
• Regression analysis involves tedious
calculations.

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 summary
After studying the student is able to answer the
following questions:
• What is meant by the concept of linear
regression analysis.
• How to Compute regression coefficients and
regression lines.
• How to predict or estimate value of
dependent variable from known values of
independent variable.
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