Best Fit Lines & Curves

4 Simple and Multiple Linear Regression

Estimators and other number jugglers like us normally like to keep things simple – it’s the rest of the world and life that makes things complicated for us. Wherever practical or justifiable, we are likely to try to put things into the perspective of linear relationships (i.e. to think in straight lines.) Sometimes this is a valid approximation to make; at other times, it would be naïve, so we need to keep our options open. We’ll be looking at these other options in the next couple of chapters.

In general, the assumption of a Linear Relationship will raise a number of issues:

1. We’re deluding ourselves if we think that everything can be predicted appropriately by a straight line.
2. What straight line? Especially ...