Next Generation Excel: Modeling In Excel For Analysts And MBAs (For MS Windows And Mac OS), 2nd Edition

Chapter 14

Data Analysis—Multi-Regression

Chapter 12 discussed in detail simple linear regression using only one independent variable where

With Multi-Regression we want to use more than one independent variable X. To predict or estimate Y, the dependent variable, we use

In Multi-Regression, multiple variables are used to predict the corresponding value. For example, a real estate agent wanting to predict an apartment’s selling price may use three variables based on historical data—size, location, and the number of bathrooms—to predict that price. The prediction method will be developed based on recently sold apartments. Predicted values from multiple regressions are linear combinations of the input variables—that is, the independent variables (X).

Looking at the previous formula:

Where:

Y is the predicted value

a is the Y intercept

X1 is the score on the first input variable (historical data), X2 the score on the second, etc. . . .

The regression coefficients (b1, b2, etc.) are equivalent to the slope in a simple regression.

This chapter will describe how to use, read, and interpret the Data Analysis ToolPak in Excel for Multi-Regressions. Unfortunately, Excel for Mac does not have ...