Example of Simple Linear Regression
Example of Simple Linear Regression
Linear regression quantifies the relationship between one or
more predictor variable(s) and one outcome variable. Linear regression is
commonly used for predictive analysis and modeling. For example, it can
be used to quantify the relative impacts of age, gender, and diet (the
predictor variables) on height (the outcome variable). Linear regression is
also known as multiple regression, multivariate regression, ordinary least
squares (OLS), and regression. This post will show you examples of linear
regression, including an example of simple linear regression and an
example of multiple linear regression.
Example of simple linear regression
The table below shows some data from the early days of the Italian
clothing company Benetton. Each row in the table shows Benetton’s sales
for a year and the amount spent on advertising that year. In this case, our
outcome of interest is sales—it is what we want to predict. If we use
advertising as the predictor variable, linear regression estimates that Sales
= 168 + 23 Advertising. That is, if advertising expenditure is increased
by one Euro, then sales will be expected to increase by 23 million Euros,
and if there was no advertising we would expect sales of 168 million Euros.