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Regression Analysis

Regression analysis is a form of prediction modeling that uses selected input attribute values to predict an output value. The difference between classification (covered in Chapter 5) and regression analysis is in the output data type. In classification, the output or predicted type is nominal; in regression the predicted type is continuous numeric.

# The Regression Model

A formal definition of the regression model is:

where:

is the value of the output variable for the observation

is the value of the first input variable for the observation

is the value of the input variable for the observation

is the random error term for the observation.

The error term is included ...