Hypothesis Tests & Model

selection
 ANOVA & Goodness of Fit
Using Analyze Of Variance (ANOVA) (Equivalent f..2
:test)
The response variable y is related to the independent
;variable x. Hence, the total variation in y given by
= SST = Sxy
:is derived into two portions
a)SSR (Sum of Squares for Regression): it measures
the amount of variation explained by using the
.regression line with one independent variable x
b)SSE (Sum of Squares for Errors): it measures
the residual/amount of variation unexplained
by using the regression line with one
.independent variable x
SSE = SST-SSR
,So that
SST = SSR + SSE
:Building the ANOVA table

Source of Degree of Sum of Squares Mean Sum oSquare F

Variation Freedom (SS) (MSS)
(df)

K (No. of
independent
Regression
(SSR) (variables

Residua
1
(SSE) N-2 SSE = SST- SSR

Total (SST)
Note that the value of (f ) is equal to () with the
.identical p-value
:Example
:Suppose you are given the following
Y = 3.82 + 0.28X
N=10, Sxx = 60.9, ∑y=52, = 292, Sxy=17.2
.Test the regression model
:Solution
)1

SSE = SST – SSR = 21.6 – 4.9 = 16.7

:Build the variance table )2
 Source of Degree of Sum of Squares Mean Square F
Variation Freedom (SS) (MSS)
(df)

1
Regression 4.9
(SSR)
Residua 8 16.7
1
(SSE) 2.33

Total (SST)
:Test the hypothesis .3
H0 : B = 0, H1 : B ≠ 0 -
.CV = 5.32, df = 1:8, a = 0.05, two-tailed -
The observed value f= (2.33 ) is less than the critical .4
.value (5.32), therefore, the null hypothesis is accepted
.Make the conclusion .5
We conclude that there is no significant relationship
between y & x variables at level of significance 0.05. This
means that the regression model dose not provide a
good fit to the data measurements, therefore, we can
not use this model in predicting the value of y from a
. given value for x
 Goodness of Fit
Goodness of Fit is the answer of the question
(How well does the regression model fit?)
To answer this question is by calculating the
: Determination Coefficient
: Determination Coefficient for simple regression
 = SSR / SST
OR
 (R
;Example
Test the goodness of fit for the previous example (Calculate
. Determination Coefficient

;Solution

SSR / SST =
0.22685 = 21.6 / 4.9
This means that the model explains (0.22685) from the changes
in the dependent variable. In other words , the independent
.variable affects the dependent variable by (22.69%)
 Exercise
Regarding the previous example regression
,model (Income and expenditure)

Evaluate the regression model. i e. Test the.1

.mode. (Uses ANOVA)
. ) ?How well the regression fit.2
You are given N = 44, CV. = 1.50, Sxx =60 ,(
,Syx=17 , ∑ Y =50 , ∑y2= 80