Business Applications of Multiple Regression

MULTIPLE REGRESSION 77

Although this approach of using multiple simple regression runs

seems to have worked well in this simplified example, we will see a better

approach in the next section. Additionally, with more complex regres-

sion applications with many more variables, this approach would quickly

become unworkable.

Multiple Regression

In the previous example, we performed simple regression twice: once on

the dependent variable and the first independent variable and then on

the leftover variation and the second independent variable. With mul-

tiple regression, we simultaneously regress all the independent variables

against a