8/26/23, 10:45 AM 4.1.2.

4 Lab - Simple Linear Regression in Python

Lab - Simple Linear Regression in Python

Objectives
In this lab, you will become familiar with the concepts of simple linear regression and working with the
provided data to make a prediction.

**Part 1: Import the Libraries and Data **

**Part 2: Plot the Data **

**Part 3: Perform Simple Linear Regression **

Scenario / Background
In statistics, linear regression is a way to model a relationship between dependent variable y and
independent variable x .

In this lab, you will analyze district sales data and perform a simple linear regression to predict annual net
sales based on the number of stores in the district.

Required Resources
1 PC with Internet access
Python libraries: pandas, numpy, scipy, and matplotlib
Datafiles: stores-dist.csv

Part 1: Import the Libraries and Data

In this part, you will import the libraries and the data from the file stores-dist.csv.

Step 1: Import the libraries.

In this step, you will import the following libraries:

matplotlib.pyplot as plt
numpy as np
pandas as pd

In [ ]:

# Code Cell 1

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Step 2: Import the data.

In this step, you will import the data from the file stores-dist.csv and verify that the file was imported
correctly.

In [ ]:

# Code Cell 2

# Import the file, stores-dist.csv

salesDist = pd.read_csv('./Data/stores-dist.csv')

# Verify the imported data

salesDist.head()

The column headings, annual net sales and number of stores in district are renamed to make it
easier during data processing.

annual net sales to sales

number of stores in district to stores

In [ ]:

# Code Cell 3
# The district column has no relevance at this time, so it can be dropped.
salesDist = salesDist.rename(columns={'annual net sales':'sales','number of stores in d
istrict':'stores'})
salesDist.head()

Part 2: Plot the Data

Step 1: Determine the correlation.

In this step, you will investigate the correlation of the data prior to regression analysis. You will also drop any
unrelated columns as necessary.

In [ ]:

# Code Cell 4
# Check correlation of data prior to doing the analysis
# # Hint: check lab 3.1.5.5

From the correlation coefficent, it appears that the column district has low correlation to the annual net
sales and number of stores in the district. So the district column is not necessary as part of the
regression analysis. The district column can be dropped from the dataframe.

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In [ ]:

# Code Cell 5
# The district column has no relevance at this time, so it can be dropped.
#sales = salesDist.drop(...)

sales.head()

From the correlation coefficent data, what type of correlation did you observe between annual net sales and
number of stores in the district?

<font color = 'gray'>Type your answer here.</font>

Step 2: Create the plot.

In this step, you will create a plot to visualize the data. You will also assign stores as the independent variable
x and sales as the dependent variable y.

In [ ]:

# Code Cell 6
# dependent variable for y axis
y = sales['sales']
# independent variable for x axis
x = sales.stores

In [ ]:

# Code Cell 7
# Display the plot inline
%matplotlib inline

# Increase the size of the plot

plt.figure(figsize=(20,10))

# Create a scatter plot: Number of stores in the District vs. Annual Net Sales
plt.plot(x,y, 'o', markersize = 15)

# Add axis labels and increase the font size

plt.ylabel('Annual Net Sales', fontsize = 30)
plt.xlabel('Number of Stores in the District', fontsize = 30)

# Increase the font size on the ticks on the x and y axis

plt.xticks(fontsize = 20)
plt.yticks(fontsize = 20)

# Display the scatter plot

plt.show()

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Part 3: Perform Simple Linear Regression

In this part, you will use numpy to generate a regression line for the analyzed data. You will also calculate the
centroid for this dataset. The centrod is the mean for the dataset. The generated simple linear regression line
must also pass through the centroid.

Step 1: Calculate the slope and y-intercept of the linear regression line.

In [ ]:

# Code Cell 8
# Use numpy polyfit for linear regression to fit the data
# Generate the slope of the line (m)
# Generate the y-intercept (b)
m, b = np.polyfit(x,y,1)
print ('The slope of line is {:.2f}.'.format(m))
print ('The y-intercept is {:.2f}.'.format(b))
print ('The best fit simple linear regression line is {:.2f}x + {:.2f}.'.format(m,b))

Step 2: Calculate the centroid.

The centroid of the dataset is calculated by using the mean function.

In [ ]:

# Code Cell 9
# y coordinate for centroid
y_mean = y.mean()
# x coordinate for centroid
x_mean = x.mean()
print ('The centroid for this dataset is x = {:.2f} and y = {:.2f}.'.format(x_mean, y_m
ean))

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Step 3: Overlay the regression line and the centroid point on the plot.

In [ ]:

# Code Cell 10
# Create the plot inline
%matplotlib inline

# Enlarge the plot size

plt.figure(figsize=(20,10))

# Plot the scatter plot of the data set

plt.plot(x,y, 'o', markersize = 14, label = "Annual Net Sales")

# Plot the centroid point

plt.plot(x_mean,y_mean, '*', markersize = 30, color = "r")

# Plot the linear regression line

plt.plot(x, m*x + b, '-', label = 'Simple Linear Regression Line', linewidth = 4)

# Create the x and y axis labels

plt.ylabel('Annual Net Sales', fontsize = 30)
plt.xlabel('Number of Stores in District', fontsize = 30)

# Enlarge x and y tick marks

plt.xticks(fontsize = 20)
plt.yticks(fontsize = 20)

# Point out the centroid point in the plot

plt.annotate('Centroid', xy=(x_mean-0.1, y_mean-5), xytext=(x_mean-3, y_mean-20), arrow
props=dict(facecolor='black', shrink=0.05), fontsize = 30)

# Create legend
plt.legend(loc = 'upper right', fontsize = 20)

Step 4: Prediction

Using the linear regression line, you can predict the annual net sales based on the number of stores in the
district.

In [ ]:

# Code Cell 11
# Function to predict the net sales from the regression line
def predict(query):
if query >= 1:
predict = m * query + b
return predict
else:
print ("You must have at least 1 store in the district to predict the annual ne
t sales.")

In [ ]:

# Code Cell 12
# Enter the number of stores in the function to generate the net sales prediction.

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What is the predicted net sales if there are 4 stores in the district?

<font color = 'gray'>Type your answer here.</font>

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