Business Applications of Multiple Regression

62 BUSINESS APPLICATIONS OF MULTIPLE REGRESSION

the regression overlaid as a line. Notice that the line slopes up. This is

expected from the positive slope of 0.7350. Notice that the regression

line crosses the Y- axis just above the X- axis. This, too, is to be expected

from the Y- intercept value of 8.1149. Finally, notice how the points are

spread out widely and are not close to the line at all. This behavior indi-

cates a low r

2

, 0.1729 in this case. For a higher r

2

, the points would be

less scattered.

It is important not to read too much into the magnitude of the slope

or the Y- intercept, for that matter. Their values are a function of the

units used to measure the various variables. Had we measured the ages in

months or ...