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Unit 3
Linear Regression
Linear Regression
Objective
• Introduction to Linear Regression
• Regression use case
• Types of regression models
• Regression modelling
• Parameter estimation
Introduction
• In 1800, a person named Francis Galton, was studying the relationship
between parents and their children.
• He investigated the relationship between height of fathers and their sons.
• He discovered that a man’s son tends to be roughly as tall as his father,
however, son’s height tended to be closer to the overall average
height of all people.
Galton call this phenomenon as “Regression” as “father’s son height

tends to regress (or drift towards) the mean (average) height of
everyone else.
Linear Regression
• Regression is used to study the relationship between two variables.
• We can use simple regression if both the dependent variable (DV)

and the independent variable (IV) are numerical.
• If the DV is numerical but the IV is categorical, it is best to use Logistic

Regression.
Linear Regression - Example
The following are situations where we can use regression:
1. Testing if IQ affects income (IQ is the IV and income is the DV).

2. Testing if hours of work affects hours of sleep (DV is hours of sleep
and the hours of work is the IV).
3. Testing if the number of cigarettes smoked affects blood pressure
(number of cigarettes smoked is the IV and blood pressure is the
DV).
4. Chances of heart failure due to high body fat
Displaying the data
• Displaying data for Testing if
IQ affects income (IQ is the
IV and income is the DV).
• When both the DV and IV are

numerical, we can represent
data in the form of a
scatterplot.
Displaying the data
• Displaying data of Chances of heart

failure due to high body fat
• It is important to perform a scatterplot

because it helps us to see if the
relationship is linear.
Regression Case
• Dataset related to Co2 emissions from different cars.
ENGINESIZE CYLINDERS FUELCONSUMPTION_COMB CO2EMISSION
0 2.0 4 8.5 196
1 2.4 4 9.6 221
2 1.5 4 5.9 136
3 3.5 6 11.1 255
4 3.5 6 10.6 244
5 3.5 6 10.0 230
6 3.5 6 10.1 232
7 3.7 6 11.1 255
8 3.7 6 11.6 267
9 2.4 4 9.2 ?
Regression Case
• Looking to the existing data of different cars, can we estimate the approx.
CO2 emission of a car, which is yet not manufactured, such as in row 9 ?
• We can use regression methods to predict a continuous value, such as CO2

Emission, using some other variables.
• In regression there are two types of variables:

1. a dependent variable (DV, which we want to predict) and
2. one or more independent variables (IV, existing features).
Regression Essentials
• The key point in the regression is that our dependent value should be
continuous and cannot be a discreet value.
• However, the independent variable or variables can be either a categorical

or continuous.
• We use regression to build such a regression/estimation model which would

be used to predict the expected Co2 emission for a new or unknown car.
Types of Regression Model
1. Simple regression is when one independent variable is used to
estimate a dependent variable.
• It can be linear or non-linear.
• Ex: predicting Co2 emission using the variable of Engine Size.
2. When more than one independent variable is present, the process is
called multiple linear regression.
• Ex: predicting Co2 emission using Engine Size and the number of
Cylinders in any given car.
Linearity of regression depends on the relation between dependent and
independent variables; it can be either linear or non-linear regression.
Regression Application Areas
• Essentially, we use regression when we want to estimate a continuous
value.
• You can try to predict a salesperson's total yearly sales (sales forecast)
from independent variables such as age, education, and years of
experience.
• We can use regression analysis to predict the price of a house in an
area, based on its size, number of bedrooms, and so on.
• We can even use it to predict employment income for independent
variables, such as hours of work, education, occupation, sex, age, years of
experience, and so on.
Simple Linear Regression
• How to calculate a regression with only 2
data points ?
• In linear regression, we calculate
regression line by drawing a connecting
line
• For classic linear regression or “Least
Square Method”, you only measure the
closeness in the “up and down” direction.
• Here we have perfectly fitted line because
we have only 2 points.
Simple Linear Regression
Regression with more data points
• Now wouldn't it be great if we
could apply this same concept to a
graph with more than just two data
points?
• By doing this, we could take
multiple men and their son’s
heights and do things like tell a
man how tall we expect his son
to be...before he even has a
son!
• This is the idea behind supervised
learning!
Regression Goal
• Our goal of linear regression is
determining the best line by
minimizing the vertical distance
between all the data points and
our line.
• There are lots of different ways to
minimize this, (sum of squared
errors, sum of absolute errors,
etc), but all these methods have a
general goal of minimizing this
distance between your line and
rest of data points.
Case Study Y: Dependent
variable
X: Independent variable
• This dataset is related to
the Co2 emission of
Continuous values
different cars.
• The question is: Given this
dataset, can we predict the
Co2 emission of a car,
using another field, such as
Engine size? Yes!
Scatter Plot
• To understand linear regression, we can
plot our variables here.
• Engine size -- independent variable,
Emission – dependent/target value that
we would like to predict.
• A scatterplot clearly shows the relation
between variables where changes in
one variable "explain" or possibly
"cause" changes in the other variable.
• Also, it indicates that these variables are
linearly related.
Inference from Scatter Plot
• As the Engine Size increases, so
do the emissions.
• How do we use this line for
prediction now?
• Let us assume, for a moment, that
the line is a good fit of data.
• We can use it to predict the
emission of an unknown car.
Regression Modeling – Fitting Line
• Fitting line help us to predict the target value, Y, using the independent
variable 'Engine Size' represented on X axis
• The fit line is shown traditionally as a polynomial.
• In Simple regression Problem (single x), the form of the model would be
𝑦ො = 𝜃1 + 𝜃2 𝑥1
𝜃1 = intercept 𝜃2 = slope of the line
• Where Y is the dependent variable, or the predicted value and X is the
independent variable.
• 𝜃1 and 𝜃2 are coefficient of linear equation
Regression Modeling
𝑦ො = 𝜃1 + 𝜃2 𝑥1
Now the questions are:
"How would you draw a line through the points?"
"How do you determine which line fits best?"
• Linear regression estimates the coefficients of the line.
• This means we must calculate 𝜽𝟎 and 𝜽𝟏 to find the best line to ‘fit’ the
data.
• Let’s see how we can adjust the parameters to make the line the best fit
for the data ?
• Let’s assume we have already found the ‘best fit’ line for our data.
Model Error
• If we have, for instance, a car with engine
size x1 =5.4, and actual Co2=250,
• Its Co2 should be predicted very close to
the actual value, which is y=250, based on
historical data.
• But, if we use the fit line it will return
ŷ =340.
• Compare the actual value with we
predicted using our model, you will find
out that we have a 90-unit error.
• Prediction line is not accurate. This error is Error = ŷ – y = 340-250 = 90
also called the residual error. linear-regression-machine-learning
Mean Absolute Error
In this, the residual for every data point, taking

only the absolute value of each so that
negative and positive residuals do not cancel
out. Then take the average of all these
residuals.
Mean Squared Error
The mean square error (MSE) is just like the MAE but squares the difference
before summing them all instead of using the absolute value. We can see
this difference in the equation below.
R2 Score
R-squared (R2) is a statistical measure that represents the proportion of the
variance for a dependent variable that's explained by an independent variable
or variables in a regression model.
So, if the R2 of a model is 0.50, then approximately half of the observed

variation can be explained by the model's inputs.
Formula for R-Squared

Parameter Estimation
• The objective of linear regression is to minimize this MSE equation, and
to minimize it, we should find the best parameters, 𝜃0 and 𝜃1 .
• How to find θ0 and θ1 in such a way that it minimizes this error?

• We have two options here:
• Option 1 - We can use a mathematic approach Or,
• Option 2 - We can use an optimization approach.
Mathematical Approach
• θ0 and θ1 (intercept and slope of the line) are the coefficients of the fit
line.
• Need to calculate the mean of the independent and dependent or target
columns, from the dataset.
• Notice : All of the data must be available.

• It can be shown that the intercept and slope can be calculated using
these equations.
• We can start off by estimating the value for θ1.
Parameter Estimation
𝑦ො = 𝜃0 + 𝜃1 𝑥1
σ𝒔𝒊=𝟏 𝒙𝒊 −ഥ
𝒙 𝒚𝒊 −ഥ
𝒚
𝜣𝟏 = 𝟐
σ𝒔𝒊=𝟏 𝒙𝒊 −ഥ
𝒙
𝑥ҧ = 3.34
𝑦ത = 256
2−3.34 196−256 + 2.4−3.34 221−256 + ………

Θ1 =
(2.0−3.34)2 +(2.4−3.34)2 + …..
Θ0 = 𝑦ത − Θ1 𝑥ҧ = 125.74 Θ1 = 39
Making Predictions
• We can write down the polynomial of the line.
ෝ = 125.74 + 39x1
𝒚
• Making predictions is as simple as solving the equation for a specific set
of inputs.
• Imagine we are predicting Co2 Emission(y) from EngineSize(x) for the
Automobile in record number 9. So, looking to the dataset, x1 = 2.4
• Implementing x1 in above equation, we can predict the CO2 emission

of this specific car (row 9) with engine size 2.4 :
ෝ = 218.6
𝒚
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Unit 3

Galton call this phenomenon as “Regression” as “father’s son height

• We can use simple regression if both the dependent variable (DV)

• If the DV is numerical but the IV is categorical, it is best to use Logistic

1. Testing if IQ affects income (IQ is the IV and income is the DV).

• When both the DV and IV are

• Displaying data of Chances of heart

• It is important to perform a scatterplot

• We can use regression methods to predict a continuous value, such as CO2

• In regression there are two types of variables:

• However, the independent variable or variables can be either a categorical

• We use regression to build such a regression/estimation model which would

In this, the residual for every data point, taking

So, if the R2 of a model is 0.50, then approximately half of the observed

Formula for R-Squared

• How to find θ0 and θ1 in such a way that it minimizes this error?

• Notice : All of the data must be available.

2−3.34 196−256 + 2.4−3.34 221−256 + ………

• Implementing x1 in above equation, we can predict the CO2 emission

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