BUEC 232 Lecture Notes - Lecture 2: Applet, Nortel, Dependent And Independent Variables

• School: Simon Fraser University
• Department: Business Economics
• Course: BUEC 232
• Professor: George Zhang

Document Summary

Two or more variables related to each observation. Amount spent of ad campaign, increase in sales. Sometimes just interested in relationships between variables. Explanatory variables explain or causes changes in response variable. Look for overall patterns and deviations from those patterns. If pattern is sufficiently regular, use a mathematical model to describe it. Look for overall pattern and striking deviations from the pattern. Non linear relationships: e. g. gdp per person vs life. Note natural ordering of explanatory variable in this example. Measures strength and direction of linear relationship. Use calculator or excel for calculations ( correl function in excel). Fit a straight line to a scatterplot. Explains changes in response variable (y) in terms of explanatory variable (x). The one that minimizes the total squared error of prediction. Outputs: the regression line ( a and b). Use the your calculator and text formulas. Use correlation and regression applet on text website.