QUANTITATIVE METHODS 1

Mr. Ferdnand A. Reyes

Simple Linear Regression 2

LESSON OUTLINE
A. Linear Regression

LEARNING OUTCOMES
Here’s what I will teach you in this course material:
A. determine the linear regression model
B. use linear regression to make predictions

RESOURCES NEEDED
For this lesson, you would need the following resources:
A. PowerPoint presentation
B. Correlation
C. Regression: Crash Course Statistics #32
D. Reference materials, tools, and equipment

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 PRETEST:
Before you start, try answering the following questions.
AGREE or DISAGREE

1. When the relationship between two variables is exponential,

linear regression fails to predict the dependent variable.
________________________________________
2. A correlation of zero implies that there is no relationship
between two variables.
________________________________________

TABLE OF CONTENTS:

03 PRETEST 07 Binary Codes; Cryptography

04 Key Point 08 Activity#1

05 Pre-Activity 09 Activity#2

06 Modular Arithmetic
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10 References
Simple Linear Regression 4

Key Point

Correlation analysis is one statistical

technique used to study causal relation-
ships among variables. Regression anal-
ysis is used to determine the nature of
relationship.

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 PRE-ACTIVITY:

Determine if the relationship between the independent

variable and the dependent variable given below has a posi-
tive, negative, or zero correlation.
1. amount of rubber on tiles and number of miles driven
2. hours spent on studying and score in quiz
3. wage earned and working experience

SELF ASSESSMENT OR EVALUATION: A positive relationship occurs when the two varia-
bles increase at the same time while a negative relationship occurs when one variable increas-
es and the other variable decreases, or vice versa.

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Pearson’s Correlation

The degree of linear association/relationship between two variables (at least of

interval scale) is measured by a correlation coefficient (r). It is sometimes called
Pearson correlation coefficient (Pearson product moment correlation coefficient)
in honor of its developer.

Using a scatter plot, we can visually see if the two variables have a positive, neg-
ative, or no relationship at all. However, the correlation coefficient (r) will give us
a more accurate description.

Properties of Linear Correlation Coefficient

1. The correlation coefficient is a unit less measure.
2. The value of r will always be between –1 and +1 inclusively.
3. If the values of x and y are unchanged, the value of r will be unchanged.
4. If the values of x and/or y are converted to a different scale, the value of r will
be unchanged.
5. The values of r is sensitive to outliers and can change dramatically if they are
present in the data.

Spearman’s Rank Correlation Coefficient. Pearson’s Product Moment Correlation

Coefficient is used to measure the strength of the relationship between two varia-
bles that are quantitative in nature. This method is not suitable for qualitative data.
For qualitative data, especially rank data, you may use Spearman’s Rank Correla-
tion Coefficient.

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Pearson’s Correlation

The formula is presented above. Let’s have the following example.

x y x2 y2 xy Key
term.
3 30 9 900 90
You put
5 35 25 1225 175 the
defini-
8 41 64 1681 328 tion
here.
10 50 100 2500 500
Yes, it is
13 51 169 2601 663 pur-
posely
15 60 225 3600 900 in really
small
18 65 324 4225 1170
fonts
20 66 400 4356 1320 because
it is a
28 70 784 4900 1960 mere
Σx=120 Σy=468 Σx2=2100 y2=25998 Σxy=7106 repeti-
tion of
what
The two variables x and y represent our data. We can add additional col-
umns so that we can simply get the summation per column, before plug-
ging it to our formula. Try to solve and see if you can get r = 0.953
We can see that we have a positive correlation. The closer the value to 1,
the higher the correlation is.

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 Excel

1 #
TY
VI
TI
AC

Task: We already know how

to compute for the correlation co-
efficient using the formula. Can you
compute for the correlation coefficient
using MS Excel?

Post activity statements:

 You can use columns some basic
operation formulas.
 There is also a correlation formula.

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Activity#2

Directions: Answer the following problem.

Alvin conducted a study and found that the correlation be-

tween the price of a gallon of gasoline and gasoline con-
sumption has a linear correlation coefficient of –0.7. What
does this result say about the relationship between the
price of gasoline and consumption? The study included
gasoline prices ranging from 2.70 to 5.3 per gallon. Is it re-
liable to apply the results of this study to prices of gasoline
higher than 5.30 per gallon? Explain.

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REFERENCES

Keller, G.(2012). Managerial Statistics, 9th Edition. China: South-Western CENGAGE Learning.

Medenhall, W., Beaver R., Beaver, B. (2010). Probability and Statistics Fundamentals. Philippines:
CENGAGE Learning.

Gonzales, J., Nocon, R. (2013) Essential Statistics. Malabon City. Mutya Publishing House

Scheaffer, Mulekar, McClave. (2012). Probability and Statistics for Engineers. CENGAGE Learning.

Orines, F. (2008). Next Century Mathematics Advanced Algebra, Trigonometry, and

Statistics. Quezon City: Phoenix Publishing House

Earnhart, R., & Adina, E. (2018). Mathematics in the Modern World. Quezon City: C& E Publishing
Inc.
Deauna, M. (1996). Elementary Statistics for Basic Education. Quezon City: Phoenix
Publishing House.

Chua, S. (2016). Soaring 21st Century Mathematics Statistics and Probability. Quezon City: Phoenix
Publishing House.

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