Data Analysis and R

UNIT 15 DATA ANALYSIS AND R

Structure Page Nos.
15.1 Introduction
15.2 Objectives
15.3 Chi Square Test
15.4 Linear Regression
15.5 Multiple Regression
15.6 Logistic Regression
15.7 Time Series Analysis
15.8 Summary
15.9 Answers
15.10 References and Further Readings

15.1 INTRODUCTION
This unit deals with the concept of data analysis and how to leverage it by using
R programming. The unit discusses various tests and techniques to operate on
data in R and how to draw insights from it. The unit covers the Chi-Square Test,
its significance and the application in R with the help of an example. The unit
also familiarises with the concept of Regression Analysis and its types
including- Simple Linear and Multiple Linear Regression and afterwards,
Logistic Regression. It is further substantiated with examples in R that explain
the steps, functions and syntax to use correctly. It also explains how to interpret
the output and visualise the data. Subsequently, the unit explains the concept of
Time Series Analysis and how to run it on R. It also discusses about the
Stationary Time Series, extraction of trend, seasonality, and error and how to
create lags of a time series in R.

15.2 OBJECTIVES
After going through this Unit, you will be able to:-
• Run tests and techniques on data and interpret the results using R;
• explain the correlation between two variables in a dataset by running
Chi-Square Test in R;
• explain the concept of Regression Analysis and distinguish between their
types- simple Linear and Multiple Linear;
• build relationship models in R to plot and interpret the data and further
use it to predict the unknown variable values;
• explain the concept of Logistic Regression and its application on R;
• explain about the Time Series Analysis and the special case of Stationary
Time Series;
• explain about extraction of trend, seasonality, and error and how to create
lags of a time series in R.

15.3 CHI-SQUARE TEST

The Chi-Square test is a statistical tool for determining if two categorical
variables are significantly correlated. Both variables should come from the same

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population and be categorical in nature, such as – top/bottom, True/False,
Black/White.Syntax of a chi-square test: chisq.test(data)
EXAMPLE:
Let’s consider R’s built in “MASS” library that contains Cars93 dataset that
represents the sales of different models of car.

Figure 15.1: Description of sample data set

As you can see, we have various variables that can be considered as categorical
variable. Let’s consider “Airbags” and “Type” for our model. You want to check,
if there is a correlation in these two categorical variables. Chi-square test is a
good indicator for such information. To perform the chi-square test, you may
perform the following steps:
• First, you need to extract this data from the dataset (see Figure 15.2).
• Next, create the table of the data(See Figure 15.2) and
• Perform chi square test on the table (See Figure 15.2)

Figure 15.2: Chi-square testing

The result shows the p value 0.0002723 which is less than 0.05 which indicates
strong correlation. In addition, the value of chi square is also high. Thus, the
variable type of car is strongly related to number of air bags.

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Chi-square test is one of the most useful test in finding relationships between
categorical variables.
How can you find the relationships between two scale or numeric variables using
R? One such technique, which helps in establishing a model-based relationship
is regression, which is discussed next.

15.4 LINEAR REGRESSION

Regression analysis is a common statistical technique for establishing a
relationship model between two variables. One of these variables is known as a
predictor variable, and its value is derived via experimentation. The response
variable, whose value is generated from the predictor variable, is the other
variable.
A regression model that employs a straight line to explain the relationship
between variables is known as linear regression. In Linear Regression these
two variables are related through an equation, where exponent (power) of both
these variables is one. It searches for the value of the regression coefficient(s)
that minimises the total error of the model to find the line of best fit through
your data.
The general equation for a linear regression is –
𝑦 = 𝑎+ 𝑏 × 𝑥
In the equation given above:
• y is called response/dependent variable, whereas x is a
independent/predictor variable.
• The a and b values are the coefficients used in the equation,
which are to be predicted.
The objective of the regression model is to determine the values of these two
constants.
There are two main types of linear regression:

• Simple Linear Regression: This kind of regression uses only one

independent variable, as shown in the equation above.
• Multiple Linear Regression: However, if you add more independent
variables like: 𝑦 = 𝑎 + 𝑏 × 𝑥! + 𝑐 × 𝑥"#⋯ , then it is called multiple
regression.

Steps for Establishing a Linear Regression:

A basic example of regression is guessing a person's weight based on his/her

height. To do so, you need to know the correlation between a person's height
and weight.

The steps to establishing a relationship are as follows:

1. Carry out an experiment in which you collect a sample of observed

height and weight values.
2. Create a relationship model using the lm() functions in R.
3. Find the coefficients from the model you constructed and use them to
create a mathematical equation.
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4. To find out the average error in prediction, get a summary of the
relationship model. Also known as residuals, as shown in Figure 15.3
5. The predict() function in R can be used to predict the weight of
new person. A sample regression line and residual are shown in Figure
15.3

residual

Figure 15.3: An example of regression mode and residual

Input Data
Below is the sample data with the observations between weight and height,
which is experimentally collected and is input in the Figure 15.4

Figure 15.4: Sample data for linear regression

lm() function create the relation model between the variable i.e. predictor and
response.
Syntax: lm(formula, data),where
formula: presenting the relation between x and y.
data: data on which the formula needs to be applied.
Figure 15.5 shows the use of this function.

Figure 15.5: Use of lm function in linear regression

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Summary of the relationship:

Figure 15.6: Results of regression

The results of regression as presented by R includes the following:
1. Five-point summary (Minimum, First Quartile, Median, Third Quartile,
and Maximum). This shows the spread of the residual. You may
observe that about 50% of residuals are in the range -1.713 to +1.725,
which shows a good model fit.
2. The t value and Pr values for the intercept (that is b in the equation y =
ax +b) and x (that is a in the equation y = ax +b).
3. The F-statistics is very high with a low p-value, indicating statistical
difference between group means.

Predict function:
Function which will be used to predict the weight of the new person.

Syntax: Predict(object, newdata),

object is the formula already formulated using lm() function.
newdata is the vector containing new value for predictor variable.

Figure 15.7: The Predict function

Plot for Visualization: Finally, you may plot these values by setting the plot
title and axis titles (see Figure 15.8). The linear regression line is shown in
Figure 15.3.

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Figure 15.8: Making a chart of linear regression

Linear regression has one response variable and one predictor variables,
however, in many practical cases there can be more than one predictor
variables. This is the case of multiple regression and is discussed next.

15.5 MULTIPLE REGRESSION

The relationship between two or more independent variables and a single
dependent variable is estimated using multiple linear regression. When you need
to know the following, you can utilize multiple linear regression.
• The degree to which two or more independent variables and one
dependent variable are related (e.g. how baking soda,
baking temperature, and amount of flour added affect the taste of cake).
• The dependent variable's value at a given value of the independent
variables (e.g. the taste of cake for different amount of baking soda,
baking temperature, and flour).
The general equation for multiple linear regression is –
y = a + b1X1 + b2X2 +...bnXn
where,
• y is response variable.

• a, b1, b2...bn are coefficients.

• X1, X2, ...Xn are predictor variables.
The lm() function in R is used to generate the regression model. Using the input
data, the model calculates the coefficient values. Using these coefficients, you
can then predict the value of the response variable for a given collection of
predictor variables.
lm() Function:
The relationship model between the predictor and the response variable is
created using this function.
Syntax: The basic syntax for lm() function in multiple regression is –
lm(y ~ x1+x2+x3...,data),
The relationship between the response variable and the predictor variables is
represented by a formula. The vector on which the formula will be applied is
called data.

INPUT Data

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Let’s take the R inbuilt data set “mtcars”, which gives comparison between
various car models based on the mileage per gallon (mpg), cylinder
displacement (“disp”), horse power(“hp”), weight of the car(“wt”) & more.
The aim is to establish relationship of mpg (response variable) with predictor
variable (disp, hp, wt). The head function, as used in Figure 15.9, shows the first
5 rows of the dataset.

Figure 15.9: Sample data for Multiple regression

Creating Relationship model & getting the coefficients

Figure 15.10: The Regression model

Please note that the input is the name of a variable, which was created in
Figure 15.9.

Figure 15.11: Display of various output parameters

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The results of regression as presented by R includes the following:

1. Five-point summary (Minimum, First Quartile, Median, Third Quartile,
and Maximum). This shows the spread of the residual. You may
observe that about 50% of residuals are in the range -1.640 to +1.061,
which shows a good model fit.
2. Low p values mean the model is statistically significant.

Creating Equation for Regression Model: Based on the intercept & coefficient
values one can create the mathematical equation as follows:
𝑌 = 𝑎 + 𝑏 × 𝑥%&'( + 𝑐 × 𝑥)( + 𝑑 × 𝑥*+
or
𝑌 = 37.15 − 0.000937 × 𝑥%&'( − 0.0311 × 𝑥)( − 3.8008 × 𝑥*+

The same equation will be applied in predicting new values.

Check your Progress 1

1. What is linear regression?

…………………………………………………………………………..
…………………………………………………………………………..
2. What does chi-square test answers?
………………………………………………………………………….
………………………………………………………………………….
3. Difference between linear and multiple regression?
………………………………………………………………………….
………………………………………………………………………….

15.6 LOGISTIC REGRESSION

In R Programming, logistic regression is a classification algorithm for

determining the probability of event success and failure. When the dependent
variable is binary (0/1, True/False, Yes/No), logistic regression is utilised. In a
binomial distribution, the logit function is utilised as a link function.
Binomial logistic regression is another name for logistic regression. It is based
on the sigmoid function, with probability as the output and input ranging from -
∞ to +∞.The sigmoid function is given below:
!
𝑔(𝑧) = !# - !" Where 𝑧 = 𝑎 + 𝑏 × 𝑥

The general equation for logistic regression is –

1
𝑔(𝑧) = .(0#1 ×3 #1$ ×3$ #1% ×3% #...)
1+ 𝑒 # #
where, y is called as the response variable, and xi are predictors.
The a and bi are coefficients.
The glm() function is used to construct the regression model.
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Syntax:
glm (formula, data,family)

• The symbol expressing the relationship between the variables is a

formula.
• The data set containing the values of these variables is known as data.
• family is a R object that specifies the model's details. For logistic
regression, it has a binomial value.
Input Data: Let’s take the R inbuilt data set “mtcars”, which provides details
of various car models & engine specifications. The transmission mode of the
car i.e. whether the car is manual or automatic is described by the column am
having a binary value as 0 or 1. You can create the model between columns
“am” (Outcome/ dependent/ response variable) and three others – hp, wt and
cyl (predictor variables).This model is aimed at determining, if car would have
manual or automatic transmission, given the horse power (hp), weight (wt) and
number of cylinders (cyl) in the car.

Figure 15.12: The sample data set for logistic regression

Figure 15.13: The logistic regression model

The null deviance demonstrates how well a model with an intercept term can
predict the dependent variable, whereas the residual deviance represents how
well a model with n predictor variables can predict the dependent variable.
Deviance is measure of goodness of fit of a model.
In the summary as the p-value is more than 0.05 for the variables "cyl" (0.0152)
and "hp" (0.0276), we will consider them insignificant in contributing to the
value of the variable "am". Only weight (wt) impacts the "am" value in this
regression model.

15.7 TIME SERIES ANALYSIS

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Basics of R Programming

A Time Series is any metric that is measured at regular intervals. It entails

deriving hidden insights from time-based data (years, days, hours, minutes) in
order to make informed decisions. When you have serially associated data, time
series models are particularly beneficial. Weather data, stock prices, industry
projections, and so on are just a few examples.

A time series is represented as follows:

A data point, say (Yt), at a specific time t (indicated by subscript t) is defined as

the either sum or product of the following three components:
Seasonality (St), Trend (Tt); and Error (et) (also known as, White Noise).

Input: Import the data set and then use ts() function.
The steps to use the function are given below. However, it is pertinent to note
here that the input values used in this case should ideally be a numeric vector
belonging to the “numeric” or “integer” class.
The following functions will generate quarterly data series from 1959:
ts(inputData, frequency =4, start = c(1959,2)) #frequency 4 => QuarterlyData
The following function will generate monthly data series from 1990
ts(1:10, frequency =12, start = 1990) #freq 12 => MonthlyData
The following function will generate yearly data series from 2009 to 2014.
ts(inputData, start=c(2009), end=c(2014), frequency=1) # YearlyData

In case, you want to use Additive Time Series, you use the following:
𝑌+ = 𝑆+ + 𝑇+ + 𝑒+
However, for Multiplicative Time Series, you may use:
𝑌+ = 𝑆+ × 𝑇+ × 𝑒+

The additive time series can be converted from multiplicative time series by
taking using the log function on the time series as represented below:
𝑎𝑑𝑑𝑖𝑡𝑖𝑣𝑒𝑇𝑆 = 𝑙𝑜𝑔(𝑚𝑢𝑙𝑡𝑖𝑝𝑙𝑐𝑎𝑡𝑖𝑣𝑒𝑇𝑆)

15.7.1 Stationary Time Series

A time series is considered “stationary” if the following criteria are satisfied:

1. When the mean value of a time series remains constant over a period of time
and hence, the trend component is removed Over time, the variance does not
increase.
2. Seasonality has a minor impact.

This means it has no trend or seasonal characteristics, making it appear to be

random white noise regardless of the time span viewed.

Steps to convert a time series as stationary

Each data point in a time series is differentiated by subtracting it from the one
before it. It is a frequent technique for making a time series immobile. To make
a stationary series out of most time series patterns 1 or 2 differencing is required.

15.7.2 Extraction of trend, seasonality and error

Using decompose() and forecast::stl, the time series is separated into seasonality,
trend, and error components (). You may use the following set of commands to
do so.
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timeSeriesData = EuStockMarkets[,1]
resultofDecompose = decompose(timeSeriesData, type=”mult”)
plot(resultofDecompose)
resultsofSt1 = stl(timeSeriesData, s.window = “periodic”)

15.7.3 Creating lags of a time-series

A lag of time series is generated when the time basis is shifted by a given
number of periods. Moreover, the state of a time series a few periods ago,
however, may still have an effect on its current state. Hence, in the time series
models, the delays of a time series are typically used as explanatory variables.
lagTimeSeries = lag(timeSeriesData, 3) #Shifting to 3 periods earlier
library(DataCombine)
mydf = as.data.frame(timeSeriesData)
mydf = slide(mydf, “x”, NewVar = “xLag1”, slideBy = -1) #create lag1
variable
mydf = slide(mydf, “x”, NewVar = “xLag1”, slideBy = 1)

Check your Progress 2

1. What is logistic regression?

…………………………………………………………………………..
2. What are the uses of Time-Series analysis?
………………………………………………………………………….
3. Differentiate between linear regression and logistic regression?
………………………………………………………………………….

15.8 SUMMARY

This unit introduces the concept of data analysis and examine its application
using R programming. It explains about the Chi-Square Test that is used to
determine if two categorical variables are significantly correlated and further
study its application on R. The unit explains the Regression Analysis, which is
a common statistical technique for establishing a relationship model between
two variables- a predictor variable and the response variable. It further explains
the various models in Regression Analysis including Linear and Logistics
Regression Analysis. In Linear Regression the two variables are related through
an equation of degree is one and employs a straight line to explain the
relationship between variables. It is categorised into two types- Simple Linear
Regression which uses only one independent variable and Multiple Linear
Regression which uses two or more independent variables. Once familiar with
the Regression, the unit proceeds to explain about the logistic regression, which
is a classification algorithm for determining the probability of event success and
failure. It is also known as Binomial logistic regression and is based on the sigmoid
function, with probability as the output and input ranging from -∞ to +∞ . At the end,
the unit introduces the concept of time series analysis and help understand its
application and usage on R. It also discusses the special case of Stationary Time Series
and how to make a time series stationary. This section further explains how to extract
the trend, seasonality and error in a time series in R and the creating lags of a time
series.

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15.9 ANSWERS
Check your Progress 1
1. A regression model that employs a straight line to explain the relationship
between variables is known as linear regression. In Linear Regression these
two variables are related through an equation, where exponent (power) of
both these variables is one. It searches for the value of the regression
coefficient(s) that minimises the total error of the model to find the line of
best fit through your data.
2. The Chi-square test of independence determines whether there is a
statistically significant relationship between categorical variables. It’s a
hypothesis test that answers the question—do the values of one categorical
variable depend on the value of other categorical variables?
3. Linear regression considers 2 variables whereas multiple regression consists
of 2 or more variables.

Check your Progress 2

1. Logistic regression is an example of supervised learning. It is used to

calculate or predict the probability of a binary (yes/no) event occurring.
2. Time series analysis is used to identify the fluctuation in economics and
business. It helps in the evaluation of current achievements. Time series is
used in pattern recognition, signal processing, weather forecasting and
earthquake prediction.
3. The problems pertaining to regression are solved using linear regression;
however, the problems pertaining to classification are solved using the
logistic regression. The linear regression yields a continuous result,
whereas logistic regression yields discrete results.

15.10 REFERENCES AND FURTHER READINGS

1. De Vries, A., & Meys, J. (2015). R for Dummies. John Wiley & Sons.
2. Peng, R. D. (2016). R programming for data science (pp. 86-181). Victoria, BC, Canada:
Leanpub.
3. Schmuller, J. (2017). Statistical Analysis with R For Dummies. John Wiley & Sons.
4. Field, A., Miles, J., & Field, Z. (2012). Discovering statistics using R. Sage publications.
5. Lander, J. P. (2014). R for everyone: Advanced analytics and graphics. Pearson
Education.
6. Lantz, B. (2019). Machine learning with R: expert techniques for predictive modeling.
Packt publishing ltd.
7. Heumann, C., & Schomaker, M. (2016). Introduction to statistics and data analysis.
Springer International Publishing Switzerland.
8. Davies, T. M. (2016). The book of R: a first course in programming and statistics. No
Starch Press.
9. https://www.tutorialspoint.com/r/index.html
10. https://data-flair.training/blogs/chi-square-test-in-r/
11. http://r-statistics.co/Time-Series-Analysis-With-R.html
12. http://r-statistics.co/Logistic-Regression-With-R.html

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