lecture 08 - regression analysis 2

7/17/2019 Lecture 08 - Regression Analysis 2

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NCC Education LimitedV1.0

Advanced Mathematics for

Business

Topic 8:

Regression Analysis 2


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NCC Education LimiteV1.0

Regression Analysis 2 Topic 8 - 8.2

Scope and Coverage

This topic will cover:

Regression using software

Multiple linear regression

- Extending regression models with dumm varia!les

- "nterpreting models


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Regression Analysis 2 Topic 8 - 8.

#earning $utcomes

By the end of this topic students will be able to:

Evaluate results from regression analsis

"nterpret results from regression analsis

Recognise the possi!ilit to extend regression

analsis

- %umm varia!les


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Regression Analysis 2 Topic 8 - 8.!

&he Simple #inear Model - '


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Regression Analysis 2 Topic 8 - 8."

x y

() '*++

), )*)

.) '+*/+

',, /*0+

x y

() 1*,.

), )*/+

.) 0*/1

',, ',*(/

&he Simple #inear Model - (


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Regression Analysis 2 Topic 8 - 8.#

Regression 2sing Software

Man software pac3ages- $pen$ffice4 5retl

- MS Excel

-S6SS4 Minita!4 SAS- R4 S

MS Excel

- (,,.7(,', %ata7%ata Analsis7Regression

- $lder &ools7%ata Analsis7 Regression

&hen all versions are similar


7/27 NCC Education LimiteV1.0

Regression Analysis 2 Topic 8 - 8.$

"s Model 2seful in 8orecasting9 - '




"s Model 2seful in 8orecasting9 - (



Regression Analysis 2 Topic 8 - 8.%

&he "nsignificant Constant Reasons :ot to Set Constant &erm to ;ero

- It prevents model being biased

- 2suall interested in the predictor varia!les anwa

-




"s Model 2seful in 8orecasting9 - 1




Multiple #inear Regression - '




Multiple #inear Regression - (

Estate agent ?realtor@ is esta!lishing an office in a

new location

ishes to !uild a model of advertised prices

Collects competitor data on- "nternal area

- #and

- %istance from nearest school- Cit region




ExampleProperty Price School Land Area District

' +). 1 '.0' '/) 8%

( +. ' ,, '.. 8%

1 (' 1 .)0 0+ 8%

+ 1,, + (0 '1. 8%

) 1) ( /1, '', AC/ /) ' /)) (,' AC

. +,( ( 000 ) AC

)+' ( 0(, '+/ AC

0 1) 1 '') ''( $ther

', +++ ' .. ')) $ther

'' (0 1 )0. ', $ther '( +/( ' '++. (,, $ther



Regression Analysis 2 Topic 8 - 8.1!

%umm aria!lesProperty Price School Land Area AC FD District

' +). 1 '.0' '/) , ' 8%

( +. ' ,, '.. , ' 8%

1 (' 1 .)0 0+ , ' 8%

+ 1,, + (0 '1. , ' 8%

) 1) ( /1, '', ' , AC/ /) ' /)) (,' ' , AC

. +,( ( 000 ) ' , AC

)+' ( 0(, '+/ ' , AC

0 1) 1 '') ''( , , $ther

', +++ ' .. ')) , , $ther

'' (0 1 )0. ', , , $ther '( +/( ' '++. (,, , , $ther



Regression Analysis 2 Topic 8 - 8.1"

&he Model "dea

price D

constant

x ?3m from a school@

x ?land in m(@

x ?floor area in m(@

?if in AC@

?if in 8%@



Regression Analysis 2 Topic 8 - 8.1#

Enter %ata into Software - '



Regression Analysis 2 Topic 8 - 8.1$

Enter %ata into Software - (

:ew or3sheet

Response

6redictors

i l i 2 i 8 8 8




Model $utput - '

R i A l i 2 T i 8 8 1%



Regression Analysis 2 Topic 8 - 8.1%

R(and AdFusted R(

R i A l i 2 T i 8 8 20




Model $utput - (

Regression Analysis 2 Topic 8 8 21




Model $utput - 1



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Model $utput - +



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Model $utput - )

Regression Analysis 2 Topic 8 8 2!


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Regression Analysis 2 Topic 8 - 8.2!

&he Model

EGuation

- expected price D +)*.( ((*'.0 x area@ ?'+* xAC@

Suppose propert is in AC and is of ',,m(what is

expected advertised price9

- expected price D +)*.( ((*'.0 x ',,@ ?'+* x '@

- expected price D +'(*+(

Regression Analysis 2 Topic 8 - 8 2"


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Regression Analysis 2 Topic 8 - 8.2"

Recap

By the end of this topic students will be able to:

Evaluate results from regression analsis

"nterpret results from regression analsis

Recogni>e possi!ilit to extend regression analsis

- %umm varia!les

Regression Analysis 2 Topic 8 - 8 2#


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Regression Analysis 2 Topic 8 8.2#

Bi!liograph

Hinton4 6R* Statistics Explained* Routledge

Ieast4 S* and &owler M* Rational ecision !a"ing

for !anagers#ile

isniews3i4 M* $uantitative !ethods for ecision!a"ers#8& 6rentice Hall

Regression Analysis 2 Topic 8 - 8 2$


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Regression Analysis 2 Topic 8 8.2$

&opic J Regression Analsis (

Any $uestions%

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