7 Feb 2017

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Week 1-3 Notes

Regression 1 (Y=Profit, X=The Rest)

R = correlation coefficient -1 to 1

R Square = coefficient of determination 0 to 1. This is the % of the variation

on the DV known from variation on the IV's

RHO stands for R

if p<.05 then reject

Ho

Ho means R = 0

Significance F = the p value

Ha means R doesn’t = 0

Because R doesn’t

= 0,

If R = 0

there is a

correlation

not a useful variable for us

this is a good

model

cannot tell coefficient from 0

Coefficient column is important

one

Profit = intercept + coefficients (categories)

EX: Bed room coefficient =

$6,000

if we incr. by 1 bed room, profit goes up $6,000

P-Value column does individual hypothesis tests on each variable

If coefficient and Lower 95% level are both negative OR both

positive, then good

If one of each, then bad

Regression 2 (Y=Profit, X=The Rest)

R and R Square are both high =

GOOD

Significance F (P value) very low

= GOOD

P-Values

If large, then fail to reject the hypothesis

If small

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