Chapter 13: Multiple Linear Regression

Dummy Variable

A variable used to model the effect of categorical independent variables in a regression model; generally takes only the value zero or one.

Categorical Independent Variable

an independent variable with categorical data

Adjusted Multiple Coefficient of Determination

A measure of the goodness of fit of the estimated multiple regression equation that adjusts for the number of independent variables in the model and thus avoids overestimating the impact of adding more independent variables.

Multiple Coefficient of Determination

A measure of the goodness of fit of the estimated multiple regression equation. It can be interpreted as the proportion of the variability in the dependent variable that is explained by the estimated regression equation.

Multiple Regression Model

The mathematical equation that describes how the dependent variable y is related to the independent variables x1,x2,...,xp and an error term E.

Least Squares Method

The method used to develop the estimated regression equation. It minimizes the sum of squared residuals (the deviations between the observed values of the dependent variable, yi, and the estimated values of the dependent variable, y^i).

Multicollinearity

The term used to describe the correlation among the independent variables.

Multiple Regression Analysis

regression analysis involving two or more independent variables

Estimated Multiple Regression Equation

the estimate of the multiple regression equation based on sample data and the least squares method

Multiple Regression Equation

the mathematical equation relating the expected value or mean value of the dependent variable to the values of the independent variables