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Multiple Linear Regression by Hand (Step-by-Step) - Statology

This document provides a step-by-step explanation of performing multiple linear regression by hand using an example dataset with one response variable (y) and two predictor variables (X1 and X2). It outlines the 5 steps to fit a multiple linear regression model: 1) calculate additional variables from the data, 2) calculate regression sums, 3) calculate coefficients, 4) place coefficients in the regression equation, and 5) interpret the regression equation.

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Aatmaj Salunke
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1K views4 pages

Multiple Linear Regression by Hand (Step-by-Step) - Statology

This document provides a step-by-step explanation of performing multiple linear regression by hand using an example dataset with one response variable (y) and two predictor variables (X1 and X2). It outlines the 5 steps to fit a multiple linear regression model: 1) calculate additional variables from the data, 2) calculate regression sums, 3) calculate coefficients, 4) place coefficients in the regression equation, and 5) interpret the regression equation.

Uploaded by

Aatmaj Salunke
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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 MENU

 NOVEMBER 18, 2020  BY ZACH

Multiple Linear Regression by Hand (Step-by-


Step)

Multiple linear regression is a method we can use to


quantify the relationship between two or more predictor
variables and a response variable.

This tutorial explains how to perform multiple linear


regression by hand.

Example: Multiple Linear Regression by Hand

Suppose we have the following dataset with one response


variable y and two predictor variables X1 and X2:
Use the following steps to fit a multiple linear regression
model to this dataset.

Step 1: Calculate X12, X22, X1y, X2y and X1X2.

Step 2: Calculate Regression Sums.

Next, make the following regression sum calculations:

Σx12 = ΣX12 – (ΣX1)2 / n = 38,767 – (555)2 / 8 = 263.875


2 2
Σx2 = ΣX2 – (ΣX2)2 / n = 2,823 – (145)2 / 8 = 194.875
Σx1y = ΣX1y – (ΣX1Σy) / n = 101,895 – (555*1,452) / 8 =
1,162.5
Σx2y = ΣX2y – (ΣX2Σy) / n = 25,364 – (145*1,452) / 8 =
-953.5
Σx1x2 = ΣX1X2 – (ΣX1ΣX2) / n = 9,859 – (555*145) / 8 =
-200.375

Step 3: Calculate b0, b1, and b2.

The formula to calculate b1 is: [(Σx22)(Σx1y)  – (Σx1x2)


(Σx2y)]  / [(Σx12) (Σx22) – (Σx1x2)2]

Thus, b1 = [(194.875)(1162.5)  – (-200.375)(-953.5)]  /


[(263.875) (194.875) – (-200.375)2] = 3.148

The formula to calculate b2 is: [(Σx12)(Σx2y)  – (Σx1x2)


(Σx1y)]  / [(Σx12) (Σx22) – (Σx1x2)2]

Thus, b2 = [(263.875)(-953.5)  – (-200.375)(1152.5)]  /


[(263.875) (194.875) – (-200.375)2] = -1.656
The formula to calculate b0 is: y – b1X1 – b2X2

Thus, b0 = 181.5 – 3.148(69.375) – (-1.656)(18.125)


= -6.867

Step 5: Place b0, b1, and b2 in the estimated linear


regression equation.

The estimated linear regression equation is: ŷ = b0 + b1*x1


+ b2*x2

In our example, it is ŷ = -6.867 + 3.148x1 – 1.656x2

How to Interpret a Multiple Linear Regression


Equation

Here is how to interpret this estimated linear regression


equation: ŷ = -6.867 + 3.148x1 – 1.656x2

b0 = -6.867. When both predictor variables are equal to


zero, the mean value for y is -6.867.

b1 = 3.148. A one unit increase in x1 is associated with a


3.148 unit increase in y, on average, assuming x2 is held
constant.

b2 = -1.656. A one unit increase in x2 is associated with a


1.656 unit decrease in y, on average, assuming x1 is held

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