Simple Linear Regression

Simple Linear Regression Model

Term Project Assignment #9

Presented to Instructor:

Professor
Quantitative Methods II
QUA-2321 – Section II

Prepared by

D.Radfor1
Student #

August 08, 2008

TABLE OF CONTENTS

EXECUTIVE SUMMARY   …………………………………………………………………….. 4
EXPLANATION OF RAW DATA   ……………………………………………………………. 5
      1.   Description
2.   What are the independent and dependent variables
HYPOTHESIS   ………………………………………………………………………………….. 6
1.   How the independent variable effects the dependent variable
INTERPRETATION OF THE LINEAR REGRESSION EQUATION   ……………………….. 6
INTERPRETATION OF Syx – Standard Error of Estimate   ……………………… 7
CORRELATION COEFFICIENT r – EXPLANATION OF r   …………………………………. 8
1.   What it means in relation to the data
COEFFICIENT OF DETERMINATION r2 – EXPLANATION OF r2   ……………………….. 8
1.   What it means in relation to the data
TESTS OF SIGNIFICANCE   …………………………………………………………………… 9
1.   Is the correlation coefficient significant?
2.   Is the overall regression model valid (F-Test)?
3.   Is the regression coefficient significant?
FORECAST OF THE LAST YEARS DEPENDENT VARIABLE   ………………………….. 11
1.   Calculation of a 95% prediction interval for the predicted value
2.   Comparison of the predictions with actual behaviour
EVALUATION OF THE REGRESSION MODEL   ………………………………………...... 13
1.   Other variables to convert to a Multiple Linear Regression Equation
Summary and Conclusion   …………………………………………………………... 13 Bibliography   ……………………………………………………………………………... 15
AppendiCES   ……………………………………………………………………………….... 16
1 – Scatter Diagram   …………………………………………………………………… 16
2 – Calculation of Linear Regression Equation – Least Squares Method   ...…………... 16
3 – Calculation of Syx (Standard Error of Estimate)   ..………………………………… 17
4 – Calculation Correlation Coefficient r   ……………………………………………… 17
4 – Calculation Coefficient of Determination r2   .……………………………………... 18
5 – Procedures and Calculations for Tests of Significance   .…………………………… 18...