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Regression Models For Quantitative (Numeric) and Qualitative (Categorical) Predictors
Regression Models For Quantitative (Numeric) and Qualitative (Categorical) Predictors
KNNL – Chapter 8
Polynomial Regression Models
• Useful in 2 Settings:
– True relation between response and predictor is
polynomial
– True relation is complex nonlinear function that can be
approximated by polynomial in specific range of X-levels
• Models with 1 Predictor: Including p polynomial
terms in model, creates p-1 “bends”
– 2nd order Model: E{Y} = b0 + b1x + b2x2 (x = centered X)
– 3rd order Model: E{Y} = b0 + b1x + b2x2 + b3x3
• Response Surfaces with 2 (or more) predictors
– 2nd order model with 2 Predictors:
E Y b0 b1 x1 b2 x2 b11 x12 b22 x22 b12 x1 x2 x1 X1 X 1 x2 X 2 X 2
Modeling Strategies
• Use Extra Sums of Squares and General Linear Tests to
compare models of increasing complexity (higher order)
• Use coding in fitting models (centered/scaled)
predictors to reduce multicollinearity when conducting
testing.
• Fit models in original units, or back-transform for
plotting on original scale* (see below for quadratic)
• For Response Surfaces, include multiple replicates at
center point for goodness-of-fit tests
^ 2
Centered variables: Y b0 b1 x b11 x 2 b0 b1 X X b11 X X
2
b0 b1 X b1 X b11 X 2 2b11 X X b11 X b0 b1 X b11 X
2
2
b1 2b11 X X b11 X bo' b1' X b2' X 2
Regression Models with Interaction Term(s)
• Interaction Effect (Slope) of one predictor variable
depends on the level other predictor variable(s)
• Formulated by including cross-product term(s) among
predictor variables
• 2 Variable Models: E{Y} = b0 + b1X1 + b2X2 + b3X1X2
X 2 0 E Y b 0 b1 X 1 b 2 0 b3 X 1 (0) b 0 b1 X 1
Solution, just use the Region 1 dummy (X2) and the region 2 dummy (X3), making
Region 3 the “reference” region (Note: it is arbitrary which region is the reference)
Example – Salary vs Experience by Region
1 if Region 1 1 if Region 2
3 regions, Y =salary, X 1 experience X2 X3
0 otherwise 0 otherwise
E Y b 0 b1 X 1 b 2 X 2 b3 X 3