MGSC 372 Lecture Notes - Lecture 9: Simple Linear Regression, Regression Analysis, Dependent And Independent Variables
10 May 2017
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From the best subsets regression output we see that. The minimum values of mallows is 0. 5 corresponding to the simple linear regression model with only (cid:2870)=(cid:891)(cid:883). (cid:889)% and (cid:2870)=(cid:891)(cid:883). (cid:885)% Note that the model with all three independent variables has a smaller (cid:2870) value of 90. 7%. So that tar explains over 91% of variability in cm values. Both the dependent variable and independent variables (cid:2869),(cid:2870),(cid:2871) , can be subject to data. Transformations of may be performed: to make the values satisfy model assumptions, to make the deterministic portion of the model a better approximation to the mean value of the transformed variable. Transformations of the independent variables are performed only for the second reason above. Suppose that consultation with an expert in the area of demand-price relationships informs you that experience has shown that demand depends on the reciprocal of the price.
