Week 11 - Simple Regression

Question 1

What is regression analysis used for?

Answer 1

Predict the value of a dependent variable based on the value of at least one independent variable
Explain the impact of changes in an independent variable on the dependent variable

Dependent variable: the variable we wish to explain
(also called the endogenous variable)
Independent variable: the variable used to explain
the dependent variable (also called the exogenous variable)

Question 2

What are SST, SSR, SSE?

Answer 2

total sum of squares (measures the variation of the values around their
mean), regression sum of squares (explained variation attributable to the linear
relationship between x and y), error sum of squares (variation attributable to factors other than the linear relationship between x and y)