For most of this book, we’ll be working on applications that do linear regression, a simple but informative statistic. Suppose that you have a series of data pairs, such as the quarterly sales figures for a particular department, shown in Table 2.1.
Table 2.1. Quarterly Sales Figures for a Hypothetical Company (millions of dollars)
A regression line is the straight line that passes nearest all the data points (see Figure 2.1). The formula for such a line is y = mx + b, or the sales (y) for a given quarter (x) rise at a quarterly rate (m) from a base at “quarter zero” (b). We have the x and y values; we’d like to determine m and b.
Figure 2.1. The ...