SCM 424: Multiple Regression Analysis

How do you develop a regression equation based on the regression analysis? How is this regression equation used for prediction purposes?

Fundamental Regression Equation: Observed Value= Fitted Value + Error

What does the adjusted R-squared value tell you?

In addition to R2 we now also use adjusted R-squared: 1. Is a measure that adjusts R-square for the number of explanatory variables in the equation. 2. Low adjusted R-square compared to R-squared suggest that some variables included in the equation are not important in explaining Y 3. The closer adjusted R-squared is in value to R-squared, the better.

What is regression analysis, how is it used, and what is its purpose?

Linear Regression: Estimates a "linear" relationship between independent (explanatory) variable(s) and a dependent (response) variable

How do you tell if the overall regression is significant?

Low p-values (less than a specified significance level, usually 5%) means that at least one of the coefficients is significant. Therefore at least one of the explanatory variables (Xi) is important for explaining Y

How do you tell if the intercept term and variable coefficients are significant?

Low p-values (less than a specified significance level, usually 5%) means that the coefficient is significant. Therefore the explanatory variable (Xi) which accompanies it, is important for explaining Y