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Lecture - 34 Notes

The document discusses testing for significance in multiple regression models using the F test and t test. It provides information on how to conduct F tests to determine overall significance and t tests to determine individual variable significance. An example of using dummy variables in a regression model for a experiment with three assembly methods is also presented.

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24 views

Lecture - 34 Notes

The document discusses testing for significance in multiple regression models using the F test and t test. It provides information on how to conduct F tests to determine overall significance and t tests to determine individual variable significance. An example of using dummy variables in a regression model for a experiment with three assembly methods is also presented.

Uploaded by

murthygrs
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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MULTIPLE REGRESSION MODEL-II

Dr. A. Ramesh
DEPARTMENT OF MANAGEMENT STUDIES

1
Agenda

• Testing for significance


– F Test
– t Test
• Python Demo for multiple regression

2
Testing for Significance

• The F test is used to determine whether a significant relationship exists


between the dependent variable and the set of all the independent
variables; we will refer to the F test as the test for overall significance.
• If the F test shows an overall significance, the t test is used to determine
whether each of the individual independent variables is significant.
• A separate t test is conducted for each of the independent variables in the
model; we refer to each of these t tests as a test for individual significance.

3
F Test

4
F test significance

5
F test significance

6
F Test

7
ANOVA table

8
t Test for individual significance

9
t Test for individual significance

10
t Test for individual significance

11
Regression Approach
to ANOVA
Regression Approach to ANOVA
• Three different assembly methods, referred to as methods A, B, and C, have been
proposed.
• Managers at Chemitech want to determine which assembly method can produce
the greatest number of filtration systems per week

A B C
58 58 48
64 69 57
55 71 59
66 64 47
67 68 49
ANOVA
Anova: Single Factor

SUMMARY
Groups Count Sum Average Variance
A 5 310 62 27.5
B 5 330 66 26.5
C 5 260 52 31

ANOVA
Source of
Variation SS df MS F P-value F crit
Between
Groups 520 2 260 9.176471 0.003818 3.885294
Within
Groups 340 12 28.33333

Total 860 14
Dummy variables for the chemitech experiment
Dummy variables for the chemitech experiment

• If we are interested in the expected value of the number of units


assembled per week for an employee who uses method C, our procedure
for assigning numerical values to the dummy variables would result in
setting A = B= 0.
• The multiple regression equation then reduces to
Dummy variables for the chemitech experiment

• For method A the values of the dummy variables are A = 1 and B = 0, and

• For method B we set A = 0 and B = 1, and


SUMMARY OUTPUT

Regression Statistics
Multiple R 0.777593186
R Square 0.604651163
Adjusted R Square 0.53875969
Standard Error 5.322906474
Observations 15

ANOVA
df SS MS F Significance F
Regression 2 520 260 9.176471 0.003818412
Residual 12 340 28.33333
Total 14 860

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 52 2.380476143 21.84437 4.97E-11 46.81338804 57.18661196 46.81338804 57.18661196
A 10 3.366501646 2.970443 0.011692 2.665023022 17.33497698 2.665023022 17.33497698
B 14 3.366501646 4.15862 0.001326 6.665023022 21.33497698 6.665023022 21.33497698
Estimation of E(y)

• b0 = 52
• b1= 10
• b2 = 14
Assembly Method Estimation of E(y)
A b0+b1 = 52+10=62
B b0+b2 = 52 +14 = 66
C 52
Testing the significance
Thank You

21

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