Business Statistics

566 Business Statistics

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Multiple regression model with k independent variables

y

i

= 

0

+ 

1

x

1

+ 

2

x

2

+ 

3

x

3

+

…

+ 

k

x

k

+ 

i

Multiple regression equation

0 1 1 2 2 3 3

ˆ

k k

y b b x b x b x b x= + + + + +

Coefficient of multiple determination for two explanatory variables

2

.12

Regression sum of squares SSR

Total sum of squares SST

y

r = =

Adjusted coefficient of multiple determination (adjusted R

2

)

Adjusted

2

SSE/ 1

1

SST 1

n k

R

n

− −

= −

−

Standard error in multiple regression

Standard error =

SSE

1n k− −

where n is the number of observations and k the number of independent (explanatory) variables.

F statistic for testing the statistical significance of the ...