Example 01

 Dependent Variable – Corn Production (Yi)

 Independent Variable – Fertilizer Usage (Xi)

 Objective of Study: to identify impact of fertilizer usage on corn production

Probability the distribution of Yi (Corn Production)

Normal
99
Mean 57
StDev 13.47
95 N 10
AD 0.262
90
P-Value 0.620
80
70
Percent

60
50
40
30
20

10
5

1
20 30 40 50 60 70 80 90
Yi (Corn Production)

Figure 01: Probability of distribution of corn production

As a result of figure 01, if the output P value (0.620) is greater than the critical p-value (0.05),
there aren’t enough evidences to rejects H0 with a 95% level of confidence. Then the corn
production follows a normal distribution with the given data set. Then researcher needs to
check whether there is a correlation between corn production and fertilizer usage.

Table 01: Correlation between fertilizer usage and corn production

Variables (Corn production Pearson correlation P value
and Fertilizer usage)
0.985 0.000

According to the data of Table 01, since the output P value (0.000) is less than the critical P
value then there are enough evidences to reject H0 with a 95% level of confidence. then there
is a strong positive correlation (0.985) between fertilizer usage and corn production. If the
corn production correlate with corn production it is necessary to check impact of fertilizer
usage on corn production.
 Variable P-Value
Fertilizer usage (Xi) 0.000
Table 02: Coefficient of Fertilizer usage

As a result of Table 02, if the output P-value of fertilizer usage (0.000) is less than the critical
P value (0.05) then there are enough evidences to reject H 0 with a 95% level of confidence.
Then there is an impact of fertilizer on corn production.
In order to check whether the developed model is significant or not, researcher needs to refer
the ANOVA output. As shown in Table 03 (Appendix 1), since the output P value (0.000) is
less than the critical P value (0.05) then there are enough evidences to reject H 0 with a 95%
level of confidence. Therefore, the developed regression model is a significant one.
As per Table 04 (Appendix 2), since the R 2 value represents more than 75%, (97.10%). As a
result of that it can be concluded that 97% of the variation of corn production can able to
explain through fertilizer usage. Therefore, it can label the fitted regression model as a good
fit model. Other 3% indicate other variable than fertilizer usage for impact on corn
production.
In order to check the model adequacy, we have to check whether the residuals follow a
normal distribution. According to Figure 02 (Appendix 3), since the output P-value (0.967)
is greater than the critical P value (0.05) then there aren’t enough evidences to reject H 0 with
a 95% level of confidence. Then residuals not follow a normal distribution. Durbin Watson
statistics value shows as 1.78361. This value is not very close to 2. Therefore, the property is
not randomly distributed within the given data set.
As per Figure 03 (Appendix 4), it shows a certain pattern in the graph, the residuals don’t
have constant variances. Then residuals are not suffering problem of Heteroscedasticity. Then
error term variance isn’t constant
Forth, we need to check whether error means close to zero or not. As shown in Figure 04
(Appendix 5), since the error variance between -4 to +4, the variance range of Y and Xi is the
low range which is closed to zero. Since all values are within -2 to +2 in the Standardized
Residuals column. Therefore, it can be concluded that there are no unusual observations
within this data set. Since all the values in % Error column are in between -10 to +10 there
are no any error terms. Thus, it can be concluded that the fitted model is appropriate for the
observed data set.
 Simple linear regression model can be developed as:
Corn Production = 27.13 + 1.660 Fertilizer usage
Appendix 1
Table 03: Significance of the developed model

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 1586.69 1586.69 268.33 0.000
Xi (Fertilizer Usage) 1 1586.69 1586.69 268.33 0.000
Error 8 47.31 5.91
Total 9 1634.00

Appendix 2

R2
Value 97.10
Table 04: Model summary

Appendix 3

Probability of the distribution of Residuals

Normal
99
Mean -6.39488E-15
StDev 2.293
95 N 10
AD 0.133
90
P-Value 0.967
80
70
Percent

60
50
40
30
20

10
5

1
-5.0 -2.5 0.0 2.5 5.0
RESI1

Figure 02: Probability of the distribution of Residuals

Appendix 4

Residual Plots for Yi (Corn Production)

Normal Probability Plot Versus Fits
99 4

90 2

Residual
Percent

50 0

10 -2

1 -4
-5.0 -2.5 0.0 2.5 5.0 40 50 60 70 80
Residual Fitted Value

Histogram Versus Order

2.0 4

1.5 2
Frequency

Residual

1.0 0

0.5 -2

0.0 -4
-4 -2 0 2 4 1 2 3 4 5 6 7 8 9 10
Residual Observation Order

Figure 03: Variation of Error terms

Appendix 5

Residual Plots for Yi (Corn Production)

Normal Probability Plot Versus Fits
99 4

90 2
Residual
Percent

50 0

10 -2

1 -4
-5.0 -2.5 0.0 2.5 5.0 40 50 60 70 80
Residual Fitted Value

Histogram Versus Order

2.0 4

1.5 2
Frequency

Residual

1.0 0

0.5 -2

0.0 -4
-4 -2 0 2 4 1 2 3 4 5 6 7 8 9 10
Residual Observation Order

Figure 04: Variances of Error mean