Business Applications of Multiple Regression

Introduction

Imagine that you are a business owner with a couple of years’ worth of

data. You have monthly sales figures, your monthly marketing budget, a

rough estimate of the monthly marketing budget for your major com-

petitors, and a few other similar variables. You desperately want this data

to tell you something. Not only that, you are sure it can give you some

business insights if you know more. But what exactly can the data tell

you? And once you have a clue what the data might tell you, how do you

get to that information?

Really large companies have sophisticated computer software to do

data mining. Data mining refers to extracting or “mining” knowledge

from large amounts of data.

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Stated another way, data mining is the pro- ...