Customer and Business Analytics

Chapter 4

Multiple Linear Regression

Linear regression is the oldest and by far the most commonly used predictive modeling method. The biologist Sir Francis Galton, a cousin of Charles Darwin, is credited with its introduction in 1877 (Bulmer, 2003). He was actually less interested in prediction per se than he was in studying how traits were passed down from one generation to the next. He plotted characteristics of one generation against characteristics of the next, and noted that he could draw a straight line through the plot. Sweet peas that were heavier than average tended to produce offspring sweet peas that were heavier, tall fathers tended to have tall sons, and smart parents tended to have smart kids. However, what initially intrigued ...