Statistical analysis and forecast of consumption of lube oil in India.

Multiple regression is the study of how a dependent variable y is related to two

or more independent variables. In other way, Multiple Regression is a statistical
method for estimating the relationship between a dependent variable and two or
more independent (or predictor) variables. Simply, MLR is a method for studying
the relationship between a dependent variable and two or more independent
variables.

Multiple Regression Equation

E(Y) = B0 + B1X1 + B2X2 + B2X2 + B3X3 +..+ BpXp +

In the Multiple regression equation, B0 , B1 , B2 , B3 ,.., Bp are the parameters

and the error term
Is the random variable. The least square method is used to develop the
estimated regression equation for the best approximated straight line
relationship between the dependent and independent variables.

In our case, we have taken the data for ten years from 2004-05 to 2013-14. Here,
we have taken four independent variables and one dependent variable. The four
dependent variables are number of vehicles, Personal disposable income,
populations and crude oil price, whereas the independent variable is
consumption of lube oil annually. The most widely used SPSS Statistics is used for
statistical analysis. The output of SPSS after performing multiple regression are
as follows:

Table: Mean and standard deviation for all the variables.

The data Descriptive Statistics shows the mean and standard deviation of
consumption of lube oil, Number of vehicles, Personal Disposable Income,
Populations and the crude oil prices. In our analysis, we have taken data of 10
years or 120 months.

Table: Correlation values among all the variables.

Correlation table shows the Pearson correlation coefficient to show the

correlation between the of consumption of lube oil, Number of vehicles, Personal
Disposable Income, Populations and the crude oil prices. The maximum
correlation with consumption of lube oil (dependent variable) is found between
the population and number of vehicles around 0.857 correlation is very strong
positive correlation. It means the consumption of lube oil will grow with the
population and number of vehicles. As population and number of vehicles will
increase the consumption of lube oil, in the future, will increase.

Table: Coefficients in tabular form to get the multiple regression equation

The coefficient table shows the value of beta which is the correlation between
consumption and independent variables. Here the significance of this correlation
is determined by t distribution. The value of the significance ranges from 0.143
to 0.929 where which means correlation is significant. The other term
Unstandarized Coefficients explains that what will be the consumption of lube
oil if we increase the respective independent variable by 1. Using above table we
arrive to following multiple regression equation which is as follows:

Y = -16228.15 +4.13E-05 A + -0.028 B + 16.603 C + 0.88 D

Where,
A = Number of vehicles
B = Personal Disposable Income
C = Population
D = Crude oil price
Y = Consumption of lube oil