October 15, 2014

The least squares regression line

(LSRL)
Recall from yesterday:
Scatterplot:
Direction
Form
Strength
Unusual features
quantitative variables
does not imply
causation
'r' applies to linear associations only
a 'bent' association
may be made linear by
re-expressing the data
After standardization
October 15, 2014
Linear Regression Line
Equation 'models' the relationship allowing us to predict y
values for any given x value
y = 34x +310 where y = rent with hotel
x = spaces from 'go'
(39, 2000)
y = 34(39)+ 310
y = 1636
'hat' means predicted
Linear Regression Line
Residual
residual = y - y
residual = 2000 - 1636
= 364
if residual > 0 then observed y value is greater than predicted
value
i.e. the actual data point is above the regression line
residual = observed - predicted
Calculating Slope of Least Squares Regression line
Recall: r = .83
for explanation, see
Math Box on page 175
Moving away from 'standardized' equation to actual
equation
This is nice, but it means we have to change all of our data to z-
scores, solve equation and then convert z-scores back to regular
data but this is too cumbersome!
slope=
y-intercept
October 15, 2014
Revisiting yesterday's problem
a =
b =
Remember: the
least squares
regression line
always passes
through the
center of the
data (x, y)
October 15, 2014
QUOTATION OF THE DAY
"Thank God the research didn't find that novels increased tooth
decay or blocked up your arteries."
LOUISE ERDRICH,
the novelist, on studies finding that after reading literary fiction people performed
better on tests measuring empathy, social perception and emotional intelligence.
To nd the equation of a regression line,
use the slope
and the point
If a scatterplot satises what conditions, we can discuss
correlation and regression line?
no outliers
no discernible pattern besides being linear
both variables quantitative
October 15, 2014
Important notes about the LSRL
Before you use the LSRL, you must look at the
scatterplot to make sure the relationship is
linear
Be sure to distinguish between actual data values and
predicted values. Use words like 'predicted' and 'on
average'
The slope of the LSRL has the same sign as r, the coorelation
coefficent
Be able to answer questions, such as:
What is the equation of the LSRL?
What is the interpretation of the slope and y-intercept?
October 15, 2014
The answer? Residuals
How well
does the line t the data?
How? Create a scatterplot of
the residuals vs. the x-values.
How appropriate is our line in making
predications?
What is it about R
2
?
R
2
: the coefficient of determination
Shows how good one term is at predicting
another. The closer r
2
is to 1, the better the
statistical chance that the input x will correctly
produce term y
If r square is .80, then 80% of the variation in the values of y is explained
by its linear relationship with the values of x
R
e
s
i
d
u
a
l
s
Registrations
400 600 800 1000
0
-10
10
October 15, 2014
Residuals (continued)
A good residual plot - one that confirms the
appropriate use of the LSRS - should :
have similar scatter throughout
have no interesting features
should have no direction of shape
Residuals (continued)
A good residual plot - one that confirms the
appropriate use of the LSRS - should :
se = standard deviation
of the residuals
A small Se implies residuals that are closely centered
about the mean
The mean of the residuals = 0
the units of the residuals are the same units of the y-values
Step 1: Check that the two variables are quantitative
Check that the association is linear
Check for presence of outliers
Before you find the best-fit-line:
Step 2: Do the math
Find the least squares line
r
r
2
October 15, 2014
State the conclusion
What does the y-intercept tell you?
What does R
2
tell you?
se = standard deviation of the residuals
October 15, 2014
Finally: check the residual plot to make sure that the linear model is
appropriate
Note: you can not work backwards;
You cannot use the linear regression line to predict x
October 15, 2014
October 15, 2014
r(sy/sx).