Linear Regressions: Outside the Classroom

The Keep it Real Project

Jordan Keig

Linear regression is defined as an approach to modeling the relationship between a scalar variable and one or more explanatory variable. It is one of the most used methods of prediction. A linear regression model fits a linear function to a set of data points. In other words, it takes two variables and puts them into a graph comparing the relationship between these variables. This graph allows you to see a correlation in the data. A correlation could help you in many ways; it could help you in seeing how one variable relates to another. For example, you could compare SAT scores to GPA and see how those two variables relate to each other. When comparing the variables, a line is formed. This line shows how related the two variables are and can be assigned an r-value. If the r-value is one, then the correlation is perfectly linear. But, the closer to 0 the r-value gets, the less linear the correlation is. The method of linear regression was first published in 1805 by a French mathematician named Adrien-Marie Legendre. This method was perfected and republished in 1809 by a German mathematician named Carl Friedrich Gauss. Even though Legendre was the first to publish it, Gauss claimed that he had known about the method since 1795. The term regression was first used in the 19th century in biology. It was used to describe when the off springs of exceptional individuals tend to be less exceptional then their parents and more like their distant relatives. Linear regression was one of the first regression methods to be seriously studied and to be used thoroughly in practical application. This is because data that is put into a linear format is much easier to compare than data in its non-linear format. When the data is in a linear format, the statistical properties of the variables

are easier to determine. Most applications of linear regressions fall into the category of prediction or quantifying the strength of a linear relationship. In can be used for predication by: collecting a set of x and y values and putting them into a model. After developing this model you can enter another set of x values and the regression will predict the next set of y values. Quantifying the strength of a linear relationship is when the relationship between x and y is used to identify the subsets of x and provide the corresponding information about y. Linear regression is not only something that I will use in algebra class, they are used daily in many common professions. Linear regressions are used for trend lines. Trend lines represents the long-term movements in time-series data after other variables have been accounted for. In other words, it shows if a particular data set has increased or decreased over time. A trend line can simply be drawn by hand through a set of data point, but it is more accurately calculated using a linear regression. Trend lines are usually straight lines, however some are higher degree polynomials depending on the curvature of the line. Trend lines are commonly used in business analytics. They are used to show changes in data over time. Trend lines are sometimes used to argue that particular actions can cause observed effects at a given point in time. Trend lines are a very simple technique. They do not require a control group, experimental design or a sophisticated analysis technique. Because of this, it has a lack of scientific validity. Linear regressions are helpful in the field of epidemiology. Epidemiology is the branch of medicine that deals with the incidence, distribution and control of diseases. An example of this is; early evidence that related tobacco smoking to

mortality and morbidity came from studies that used regression analysis. They used regression models in which cigarette smoking was the independent variable and lifespan was the dependent variable. This helped researchers find that smoking cigarettes was indeed linked to a shorter lifespan. However, there are other variables that you have to consider when doing experiments like this. For example, you might have to take into consideration the persons socio-economic status, their education and even their income. Also, there could be a hypothetical gene that increases mortality but also causes people to smoke more. All of these things are variables that epidemiologists must take into consideration when using linear regressions in their work. To prevent these variables getting in the way, researchers have created randomized controlled trials. These trials are used to generate more evidence than can be obtained using regression analysis data. Linear regressions are also used in financing, economics and environmental sciences. They are used in financing to determine the capital asset pricing model. The capital asset pricing model is used to determine the appropriate required rate of return. Linear regression models are also used for finding the beta for analyzing and quantifying the systematic risk of an investment. This is accomplished by using the beta coefficient of the linear regression model. The beta coefficient is the number used to describe the relation of its returns with that of the financial market on the investment. Linear regressions are the most frequently used way to measure economic data. It is used to predict consumption spending, fixed investment spending, inventory investment, purchases of a countrys exports spending on imports, the

demand to hold liquid assets, labor demand and labor supply. Linear regressions are also widely used in environmental sciences. For example, in Canada, the Environmental Effects Monitoring Program used linear regressions and statistical analysis to measure the effects of pulp mill and metal mine on the aquatic ecosystem. I applied Linear Regressions to my life through my visual. I wanted to use a linear regression to find the effect (if there was one) of GPA on SAT scores. This applies to my life because I want to know about how to get good SAT scores to get into a good college. Here is my work:

In conclusion, linear regressions can be used for many things outside of the classroom. They can be used for virtually any situation in which you are comparing two data points. Specific professions when they are used are epidemiology, financing, economics and environmental sciences. I can use linear regressions in my life to compare SAT score to GPA and SAT prep courses to SAT score. I am going to do this in my visual portion of the project. This is helpful to me because it shows me what factor will help me score higher on my SAT and, in turn, get into the college of my choice.

Bibliography: Francis Galton. "Regression Towards Mediocrity in Hereditary Stature," Journal of the Anthropological Institute, 15:246-263 (1886). Kaw, Autar; Kalu, Egwu (2008). "Numerical Methods with Applications". [2]., Chapter 6 deals with linear and non-linear regression. Cohen, J., Cohen P., West, S.G., & Aiken, L.S. (2003). Applied multiple regression/correlation analysis for the behavioral sciences. (2nd ed.) Hillsdale, NJ: Lawrence Erlbaum Associates Draper, N.R. and Smith, H. Applied Regression Analysis Wiley Series in Probability and Statistics (1998) Robert S. Pindyck and Daniel L. Rubinfeld (1998, 4h ed.). Econometric Models and Economic Forecasts,, ch. 1 (Intro, incl. appendices on operators & derivation of parameter est.) & Appendix 4.3 (mult. regression in matrix form). "Linear Regression." DTREG -- Predictive Modeling Software. Web. 26 Nov. 2011. <http://www.dtreg.com/linreg.htm>.