Multiple Regression

In the last chapter, we saw how to construct a simple regression model. Simple regression described the linear relationship between one dependent variable and a single independent variable. However, in most business situations it takes more than a single independent variable to explain the behavior of the dependent variable. For example, a model to explain company sales might need to include advertising levels, prices, competitor actions, and perhaps many more factors. This example of using various independent variables—like advertising, price, and others—is a good mental model to use when thinking about multiple regression.

When we wish to use more than one independent variable in our regression model, it is called ...

Get Business Applications of Multiple Regression, Second Edition now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.