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Simple Linear Regression: John Vincent C. Asuncion

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10 views19 pages

Simple Linear Regression: John Vincent C. Asuncion

Uploaded by

Anna Maria Paz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Simple Linear

Regression
John Vincent C. Asuncion
Simple Regression
 Simple regression analysis is a statistical tool that
gives us the ability to estimate the mathematical
relationship between a dependent variable (usually
called y) and an independent variable (usually called
x).
 The dependent variable is the variable for which we
want to make a prediction.
 While various non-linear forms may be used, simple
linear regression models are the most common.
Introduction
• The primary goal of quantitative lot size Man-hours
analysis is to use current 30 73
information about a phenomenon 20 50
to predict its future behavior.
60 128
• Current information is usually in 80 170
the form of a set of data. 40 87
• In a simple case, when the data 50 108
form a set of pairs of numbers, 60 135
we may interpret them as 30 69
representing the observed values
70 148
of an independent (or predictor )
variable X and a dependent ( or 60 132
response) variable Y.
Introduction
 The goal of the analyst
who studies the data is to Statistical relation be tween Lot size and Man-Hour

find a functional relation


180

160

y  f (x) 140

120

between the response


100

Man-Hour
80

variable y and the 60

40

predictor variable x. 20

0
0 10 20 30 40 50 60 70 80 90
Lot size
Regression Function

 The statement that the relation


between X and Y is statistical
should be interpreted as providing
the following guidelines:
1. Regard Y as a random variable.
2. For each X, take f (x) to be the
expected value (i.e., mean value)
of y.
3. Given that E (Y) denotes the
expected value of Y, call the
equation
E (Y )  f ( x)
the regression function.
Regression Formula:
 Regression Equation(y) = a + bx

 Slope(b) = (NΣXY - (ΣX)(ΣY)) / (NΣX2 - (ΣX)2)

 Intercept(a) = (ΣY - b(ΣX)) / N

 x and y are the variables.


 b = The slope of the regression line
 a = The intercept point of the regression line and the y
axis.
 N = Number of values or elements
 X = First Score Y = Second Score
 ΣXY = Sum of the product of first and Second Scores
 ΣX = Sum of First Scores ΣY = Sum of Second Scores
 ΣX2 = Sum of square First ScoresS
Regression Example:
 To find the Simple/Linear Regression of

X Values Y Values

60 3.1

61 3.6

62 3.8

63 4

65 4.1
 To find regression equation, we will first find
slope, intercept and use it to form
regression equation.

 Step 1:
◦ Count the number of values. N = 5
Step 2:
Find XY, X2

X Value Y Value X*Y X*X

60 3.1 60 * 3.1 = 186 60 * 60 = 3600

61 3.6 61 * 3.6 = 219.6 61 * 61 = 3721

62 3.8 62 * 3.8 = 235.6 62 * 62 = 3844

63 4 63 * 4 = 252 63 * 63 = 3969

65 4.1 65 * 4.1 = 266.5 65 * 65 = 4225


 Step 3:
◦ Find ΣX, ΣY, ΣXY, ΣX2

X Value Y Value X*Y X*X


60 3.1 60 * 3.1 = 186 60 * 60 = 3600
61 3.6 61 * 3.6 = 219.6 61 * 61 = 3721
62 3.8 62 * 3.8 = 235.6 62 * 62 = 3844
63 4 63 * 4 = 252 63 * 63 = 3969
65 4.1 65 * 4.1 = 266.5 65 * 65 = 4225
ΣX = 311 ΣY = 18.6 ΣXY = 1159.7 ΣX2 = 19359
 Substitute in the above slope formula given.

 . Slope(b) = (NΣXY - (ΣX)(ΣY)) / (NΣX2 -


(ΣX)2)

 = ((5)*(1159.7)-(311)*(18.6))/
 ((5)*(19359)-(311)2)
 = (5798.5 - 5784.6)/(96795 - 96721)
 = 13.9/74
 = 0.19
 Step 5:
◦ Now, again substitute in the above intercept
formula given.

◦ Intercept(a) = (ΣY - b(ΣX)) / N


◦ = (18.6 - 0.19(311))/5
◦ = (18.6 - 59.09)/5
◦ = -40.49/5
◦ = -8.098
 Step 6:
◦ Then substitute these values in regression
equation

◦ Regression Equation(y) = a + bx
◦ = -8.098 + 0.19x.
◦ Suppose if we want to know the approximate y
value for the variable x = 64. Then we can
substitute the value in the above equation.

◦ Regression Equation(y) = a + bx
◦ = -8.098 + 0.19(64).
◦ = -8.098 + 12.16
◦ = 4.06

◦ This example will guide you to find the


relationship between two variables by calculating
the Regression from the above steps.
Another Example:
 The weekly advertising expenditure (x) and weekly sales (y) are presented
in the following table.

n y x xy x2

1 1250 41 51250 1681

2 1380 54 74520 2916

3 1425 63 89775 3969

4 1425 54 76950 2916

5 1450 48 69600 2304

6 1300 46 59800 2116

7 1400 62 86800 3844

8 1510 61 92110 3721

9 1575 64 100800 4096

10 1650 71 117150 5041

14365 564 818755 32604


 From previous table we have:
 The least squares estimates of the regression
coefficients are:
 The estimated regression function is:

 This means that if the weekly advertising


expenditure is increased by $1 we would expect
the weekly sales to increase by $10.8.
 END OF PRESENTATION

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