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What Is Regression Analysis

Regression analysis is a statistical method used to estimate relationships between variables and model future relationships. It includes linear, multiple linear, and nonlinear regression. Linear regression assumes a linear relationship between variables and that residuals are random and normally distributed. Simple linear regression uses one independent variable, while multiple linear regression uses multiple independent variables to predict the dependent variable.

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27 views

What Is Regression Analysis

Regression analysis is a statistical method used to estimate relationships between variables and model future relationships. It includes linear, multiple linear, and nonlinear regression. Linear regression assumes a linear relationship between variables and that residuals are random and normally distributed. Simple linear regression uses one independent variable, while multiple linear regression uses multiple independent variables to predict the dependent variable.

Uploaded by

michoel.ahmaad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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What is Regression Analysis?

Regression analysis is a set of statistical methods used for the estimation of


relationships between a dependent variable and one or more independent
variables. It can be utilized to assess the strength of the relationship
between variables and for modeling the future relationship between them.

Regression analysis includes several variations, such as linear, multiple


linear, and nonlinear. The most common models are simple linear and
multiple linear. Nonlinear regression analysis is commonly used for more
complicated data sets in which the dependent and independent variables
show a nonlinear relationship.

Regression Analysis – Linear Model Assumptions

Linear regression analysis is based on six fundamental assumptions:

1. The dependent and independent variables show a linear relationship


between the slope and the intercept.
2. The independent variable is not random.
3. The value of the residual (error) is zero.
4. The value of the residual (error) is constant across all observations.
5. The value of the residual (error) is not correlated across all
observations.
6. The residual (error) values follow the normal distribution.

Regression Analysis – Simple Linear Regression

Simple linear regression is a model that assesses the relationship between a


dependent variable and an independent variable. The simple linear model is
expressed using the following equation:

Y = a + bX + ϵ

Where:

 Y – Dependent variable
 X – Independent (explanatory) variable
 a – Intercept
 b – Slope
 ϵ – Residual (error)

Regression Analysis – Multiple Linear Regression

Multiple linear regression analysis is essentially similar to the simple linear


model, with the exception that multiple independent variables are used in
the model. The mathematical representation of multiple linear regression is:

Y = a + bX1 + cX2 + dX3 + ϵ

Where:
 Y – Dependent variable
 X1, X2, X3 – Independent (explanatory) variables
 a – Intercept
 b, c, d – Slopes
 ϵ – Residual (error)

Multiple linear regression follows the same conditions as the simple linear
model. However, since there are several independent variables in multiple
linear analysis, there is another mandatory condition for the model:

 Non-collinearity: Independent variables should show a minimum


correlation with each other. If the independent variables are highly
correlated with each other, it will be difficult to assess the true
relationships between the dependent and independent variables.

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