Linear Regression Flashcards
What does a slope of 2 mean?
That every 1-unit change in X yields a 2-unit change in Y
What is the formula to find the slope?
Rise/Run
What is the formula to find linear?
Y = Mx + B
What measures the relative strength of the linear relationship between two variables?
Correlation
True or False:
Correlation is unit-less
True
What is the range of correlation?
-1 and 1
Fill in the Blanks:
The closer correlation is to -1, the ______ the ______ linear relationship
- Stronger
1. Negative
Fill in the Blanks:
The closer correlation is to 1, the ______ the ______ linear relationship
- Stronger
2. Positive
Fill in the Blanks:
The closer correlation is to 0, the ______ any ______ linear relationship
- Weaker
2. Positive
What measures the strength and direction of the linear relationship?
The Coefficient of Correlation
How do you know when a scatter plot has a correlation coefficient of -1?
The dots form a downward line
How do you know when a scatter plot has a correlation coefficient of 1?
The dots form a upward line
How do you know when a scatter plot has a correlation coefficient of 0?
The dots form a straight line
How do you know when a linear correlation has no relationship on a scatter plot?
The dots are scattered everywhere
How do you know when a linear correlation has a relationship on a scatter plot?
The dots are clustered together
True or False:
In linear correlation, the two variables are treated as equals
True
Fill in the Blanks:
In linear regression, one variable is considered the ________ variable while the other is considered the ________ variable
- Independent
2. Dependent
In linear regression which variable is considered the independent variable?
X
In linear regression which variable is considered the dependent variable?
Y
What is another name for the x variable in linear regression?
The predictor
What is another name for the y variable in linear regression?
The outcome
What is the difference between linear regression and correlation?
Correlation tells if two things travel together while Regression tells if one thing can predict another
List the 4 things that linear regression assumes
- The relationship between X and Y is linear
- Y is distributed normally at each value of X
- The variance of Y at every value of X is the same
- The observations are independent
Which function provides the correlation coefficient (r)?
The CORREL function
Which function provides r-squared?
The RSQ function
Which function provides the y-intercept?
The INTERCEPT function
Which function returns the best fit line against x values?
The TREND function
What should you do if you have more than 1 causal (i.e. X) variable?
Use multiple linear regressions
What is the percentage variation explained by the X variables?
The adjusted r square
What does it indicate when the significance F is < .05?
That regression is significant at 95% confidence level
What does it indicate when the p-values of variables is < .05?
That variables are significant at 95% confidence level
What arises when two variables that measure the same thing or similar things are both included in a multiple regression model?
Multicollinearity
What is a numeric variable that represents categorical data?
A dummy variable
What is the dummy variable also known as?
The indicator variable
List the 4 steps to using multiple regression in Excel
- Input your Y and X variables into the input box
- Select where you want the output to go
- Drop X variables that fail the P-value test
- Rerun your model
True or False:
Name of the game in multiple regression is to use the maximum number of variables required to predict Y
False, minimum
What are 3 examples of categorical data?
Gender, race, and political affiliation
What is the regression equation?
Income = b0+ b1X1+ b2X2
