INTRODUCTION “To LINEAR REGRESSION Lenwning: Outcome: A_ Simple tineay regrerion model: Y= bg thy G4 & Here, ye Dependent vorjalble, > Independant Variable bo = Shtercept coepHuien b, = Slope cecfticienr. Example: Create a sierple Lineorr vepremon model using the foltousing coperetmechion : — snj4a4 2 3 4s 6 x a 4 6 a to 42. YY s * 3 bs ay 28 Calcutaksr-» Q0d4 FLDATA] -» Taceve KO! te 706 & YOF foyse 9 02 staal = 2-40 Tbr Linear waqvenion model? fi = ones + 240% +E Qnterpectalion y cn xX Predicted Volue oY Renal Exeter 4 2 ~ONSKQYOR= ACES 0-33 2 4 an a on 3 6 (war 3 OF 013, 4a 19.0% ou 1-93 5 40 2.8 On ons, y 6 a 28-6 28 -0.6% Learning, Outs: & © Linear Rezrenion Medel > Yi = Kat ba + gj ® Thtercept [bs] denoles re point ushere ne Tegresion Une fnterxech with yeawit ok X20. The inberceph ir an estimate of the chpenten’ vomioble whi re indlopendint vowable is O- bo = V- 4 ® ® Slope [bj] dewriber the change JOY fo & one -untt change in X. TE aay ae porltively wotated, b, is positive. Lupwarel sloping Line). yey ow veqastvely, redladed, boy is negative. [downward Flos NE FB Br fae =e Assumption 4 * NoRmMAUUTY The atcunplion of PorMality vequives Inak the Betiduade be nownall didmputed . This doe nut mean -trauh the ctejendenr indepenctonr Varialeles enurt be noroally dicmbured + oLeavning Ovtoome =O Try -b obsewe and understand -tne below table: we 2 GO) YW seunpen gpeR PLN G oF sas 02s 422 0-063 US S63 yg OU SBAS 1 3IS 42s eal 50-166 Is 5 wes seas \s-016 1:84) 20 400 (BAT ee 6.24) 23.466 40 @ 8S -4aas B36 564) o \25 20-Sd -0.5d oo 640d eo 141-Gas- [sse] [ssr] bo = 4885 eet b= 425 Noe: S&T = SSE + SSR ie, (yj)? = (y-IP+ G- (Measure of Goodness of Fir of the Taodel . CoBrFICHENT See Ser is the fo at the Voriatien Of te independent Vorsaleles OF DETERMINATION | CoePhictenr Of Deteaminakon = R2 ie caefhicient of detetninatin dependint vorriable hak ic exploinecl ey fe Howes to see Hp Our wogrerion model ie -stetistally meonlgpul, GSI need to Crcuck Aidithiouted tot statistic (lear of hppotns) - Lecening Outcome : E ANouA Table P*3NEE7 2) Standard Brse o Estimate (Se) = [MSE [lower the better] > S:D- of Exams @ Fi stot = mse 5 TP Faia > Povitca) value, tt weutd be concluded tnar the Slope oeFiecien ic Statich'caly differenr fom 260 and tne model ic Stadsti : Note: F-test ic one-tailed. " steatty meaning fatANovn Table [Refer to example of Lo(p)] Source — Surg Squares Mean Rquorres gre SSR - INS 2 o.90 oat ——s Sst 23450 ay stcnen 19). 625~ MER = 141 625° ck = MSE = 16-0104 Rerr GaAs MSE = 11-4688 a ™SE esa tal 334-50 Se = Vrs = Sia = 346 Ascumes Level of Significance = 7% Now, since, dt) = 1 and dtp =4 (6-2) and level of signifi com ce = S%, Feritical value = 4-H Algs, cince, Fe shak > Peritcab fe e014 PAA tre model ic otahist cally meaning tu Leaxning Outcome : & (D MYPOWESIE TEST OF SLOPE COEFFICIENT: Null Hypotmecis Ho by Alternative typotmeris > Ho. Rejecting. Noll shall inply Static Healy. axdlevanr. by) #O- ! at the slope Is Alffexent orn Tere and model is testat = bin ©, degree of freedom = n-2 5 level of signiPiconce = bs Sty = Se . Spy = Standard emer, of slope Standard exer of estmake. Vimar | TE, t-stak > Leviteal, be Stat < texte. oy Reject null WYP: (a) Hypomesis Test_OF CORRELATOR: Null Hypotneais & Het P= Aiternative Hyponbis > Ha? pro. Rejecting pul shalt Inply that the conelaton lehwean KL is diferent fesm 220 ord me the Variables Ove Chongty correlated usin 2ath ofr, testa = ENO 5 of Reedom = n-2, Level g significance = Vie t 4 a C2, tomar > tainoly Listah < teewbal & Reject mut hypotveris. Note: ‘the above texts con be shuctured Q0 one-tailed tear. ty. Je. Nut For Ceor 4 Hot b) SO 5 Hath 70- | Null fr Pak 2 > Hor PSO 5 Har PPOs For ms above teak, IP, teak > Letreal D Reject me null hypotneis.CD hyPomess Tests of tHe mTeRce PT tetat = bo — hypetnesized value Sbo whit, Sto = ee 5 dom = 9-2 vue J ht SQ 2 degre ff . (I) Smportan’ Notte += (@) Ushen an Indupencunt voniable is used ar o dummy varahle tak taker on the va se ar 5 yik 1c called indicate variable: (e) Smaller p-valuts (ie smalitot level of efgaifcane ar which He rns can be rejecded) ¢hall Indiake greater Lcelinord of me regresmien rnodtt being. valict. pull hy G_ = B+ bi xe lohere, de = Forecasted value of the dependant voniable- = Gatercepr a §, = slope Xp Expected value f tee indepen dunh verrable . PREDICTION _TNTTERYAL: Gnterod = Gy + (decried for la. x SE) Lohere, Y= Forecasted value of tne clpenctant voniobte Se= Se tak Wen é ‘ Si -*)* Leptening Oulvoma | H s Cer Bad Loa tin Model: Unyj = bot biXi Fey “ze Line tog model > Vie, bot bie (log by tnx a ode): WY = bot bibem Fer Mi= € oe bine