Business Statistics, Second Edition

Chapter 14

Regression Analysis

LEARNING OBJECTIVES

After studying this chapter, you should be able to

• use simple linear regression for building models to business data.

• understand how the method of least squares is used to predict values of a dependent (or response) variable based on the values of an independent (or explanatory) variable.

• measure the variability (residual) of the dependent variable about a straight line (also called regression line) and examine whether regression model fits to the data.

The cause is hidden, but the result is known.

—Ovid

I never think of the future, it comes soon enough.

—Albert Einstein

14.1 INTRODUCTION

In Chapter 13 we introduced the concept of statistical relationship between two variables such as: ...