Module 9 - Simple Linear Regression & Correlation
Module 9 - Simple Linear Regression & Correlation
SIMPLE LINEAR
REGRESSION &
CORRELATION
ENGINEERING DATA ANALYSIS
REGRESSION CORRELATION
expresses the quantifies the strength
relationship in the form of the linear relationship
of an equation between a pair of
variables
REGRESSION ANALYSIS
set of statistical methods used for
the estimation of relationships
between a dependent variable
and one or more independent
variables. It can be utilized to
assess the strength of the
relationship between variables
and for modeling the future
relationship between them.
OBJECTIVES
of Regression Analysis
1. determines how much dependent variable
changes with changes in each of the
independent's variables
2. forecasts or predicts the value of dependent
variable based on the values of the independent's
variables
Regression Analysis develops a linear relationship
between a response variable and explanatory
variables for the purposes of prediction
LINEAR explores relationships that can be
readily described by straight lines
REGRESSION or their generalization to many
dimensions
characteristic whose
DEPENDENT value depends on the
variable values of independent
variables
ASSUMPTION of Regression Analysis
The relationship between independent
variable and dependent is linear.
The expected value of the error term is zero.
The variance of the error term is constant for all the
values of the independent variable, the assumption of
homoscedasticity.
There is no autocorrelation.
The independent variable is uncorrelated with the error
term.
ASSUMPTION of Regression Analysis
The error term is normally distributed.
On an average difference between the observed value
(yi) and the predicted value (ˆyi) is zero.
On an average the estimated values of errors and values
of independent variables are not related to each other.
The squared differences between the observed value
and the predicted value are similar.
There is some variation in independent variable. If there
are more than one variable in the equation, then two
variables should not be perfectly correlated.
INTERCEPT or CONSTANT
Intercept is the point at which the regression intercepts y-axis.
Intercept provides a measure about the mean of dependent
variable when slope(s) are zero.
If slope(s) are not zero, then intercept is equal to the mean of
dependent variable minus slope × mean of independent
variable.
SLOPE
Change is dependent variable as we change independent
variable.
Zero Slope means that independent variable does not have
any influence on dependent variable.
For a linear model, slope is not equal to elasticity. That is
because; elasticity is percent change in dependent variable, as
a result one percent change in independent variable.
SIMPLE LINEAR REGRESSION
is a statistical method that allows us to summarize and
study relationships between two continuous
(quantitative) variables.
In a cause-and-effect relationship, the INDEPENDENT
variable is the CAUSE, and the DEPENDENT variable is
the EFFECT.
Least squares linear regression is a method for
predicting the value of a dependent variable y, based on
the value of an independent variable x.
One variable, denoted (x), is regarded as the
predictor, explanatory, or independent variable.
The other variable, denoted (y), is regarded as the
response, outcome, or dependent variable.
SIMPLE REGRESSION MODEL
x = independent variable
y = dependent variable
y = a + bx a = y intercept/regression constant
b = slope of the line
wherein:
Example:
A study is conducted involving 10 patients to investigate the
relationship and effects of patient's age and their blood pressure.
CORRELATION
statistical measure that indicates the
extent to which two or more variables
fluctuate together.
CORRELATION CAUSATION