Está en la página 1de 17 MULTIPLE REGRESSION Mr. Pranav Ranjan & Ms. Razia Sehdev
ICTC, LPU The Multiple Regression
Model

# Idea: Examine the linear relationship between 1 dependent (Y) & 2 or more independent variables (X i)

## Multiple Regression Model with k Independent Variables: Y
i

### Population slopes # 2 # i Mr. Pranav Ranjan & Ms. Razia Sehdev
ICTC, LPU

# • Assumptions

# themselves. Mr. Pranav Ranjan & Ms. Razia Sehdev
ICTC, LPU Assumptions

# in Statistics Associated with Multiple
Regression

# Adjusted R 2

## – After the first few variables, the additional independent variables do not make much contribution. Mr. Pranav Ranjan & Ms. Razia Sehdev
ICTC, LPU

# Statistics Associated with Multiple Regression

# The test statistic has an F distribution with k and (n - k - 1) degrees of freedom. Mr. Pranav Ranjan & Ms. Razia Sehdev
ICTC, LPU Statistics Associated with
Multiple Regression

# The partial regression coefficient, b , denotes the change in the predicted value, , per unit change

### 1 # in X
1

# are held constant. Mr. Pranav Ranjan & Ms. Razia Sehdev
ICTC, LPU

# Multiple Regression Output

### 47.46341 # Sales  306.526 - 24.975(Price)  74.131(Advertising)

### 15 Significance
ANOVA
df
SS
MS
F
F
14730.01
Regression
2
29460.027
3
6.53861
0.01201
Residual
12
27033.306
2252.776
Total
14
56493.333
Coefficien
Standard
Upper
ts
Error
t Stat
P-value
Lower 95%
95%
Intercept
306.52619
114.25389
2.68285
0.01993
57.58835
555.46404
Mr. Pranav Ranjan & Ms. Razia Sehdev
Price
-24.97509
10.83213
-2.30565
0.03979
-48.57626
-1.37392
ICTC, LPU
25.96732
2.85478
0.01449
17.55303
130.70888

# The Multiple Regression Equation  # Sales  306.526 - 24.975(Price)  74.131(Advertising)

### Advertising is in \$100’s.  b 1 = -24.975: sales
will decrease, on
average, by 24.975
pies per week for
each \$1 increase in
selling price, net of
the effects of changes
due to advertising
Mr. Pranav Ranjan & Ms. Razia Sehdev
ICTC, LPU

# Using The Equation to Make Predictions

# price is \$5.50 and advertising is \$350: # Predicted sales is 428.62 pies

## Note that Advertising is in \$100’s, so \$350 means that X 2= 3.5 Mr. Pranav Ranjan & Ms. Razia Sehdev
ICTC, LPU

# Multiple Coefficient of Determination

## (continued) Multiple R
0.72213
SSR
29460.0
R Square
0.52148
r 2 
 .52148
SST
56493.3
Adjusted R
Square
0.44172
Standard Error
Observations
47.46341
15
52.1% of the variation in pie sales
is explained by the variation in
price and advertising
Significance
ANOVA
df
SS
MS
F
F
14730.01
Regression
2
29460.027
3
6.53861
0.01201
Residual
12
27033.306
2252.776
Total
14
56493.333
Coefficien
Standard
Upper
ts
Error
t Stat
P-value
Lower 95%
95%
Intercept
306.52619
114.25389
2.68285
0.01993
57.58835
555.46404
Price
-24.97509
Mr. Pranav Ranjan & Ms. Razia Sehdev
10.83213
-2.30565
0.03979
-48.57626
-1.37392
ICTC, LPU
Advertising
74.13096
25.96732
2.85478
0.01449
17.55303
130.70888

### Regression Statistics Adjusted r 2

# .44172

### 0.44172 ### 0.01993

Mr. Pranav Ranjan & Ms. Razia Sehdev

ICTC, LPU

### -48.57626  ## size and number of independent variables

### -1.37392 F Test for Overall Significance
(continued)
Regression Statistics
Multiple R
R Square
Adjusted R
Square
Standard Error
0.72213
0.52148
0.44172
MSR
14730.0
47.46341
F 
 6.5386
Observations
15
MSE
2252.8
With 2 and 12 degrees
of freedom
Significance
P-value for
the F Test
ANOVA
df
SS
MS
F
F
14730.01
Regression
2
29460.027
3
6.53861
0.01201
Residual
12
27033.306
2252.776
Total
14
56493.333
Coefficien
Standard
Upper
ts
Error
t Stat
P-value
Lower 95%
95%
Intercept
306.52619
114.25389
2.68285
0.01993
57.58835
555.46404
Price
-24.97509
10.83213
-2.30565
0.03979
-48.57626
-1.37392
Advertising
74.13096
25.96732
2.85478
0.01449
17.55303
130.70888
Mr. Pranav Ranjan & Ms. Razia Sehdev Are Individual Variables Significant?
Regression Statistics
(continued)
Multiple R
R Square
Adjusted R
Square
Standard Error
Observations
0.72213
0.52148
t-value for Price is t = -2.306, with
p-value .0398
0.44172
47.46341
15
t-value for Advertising is t = 2.855,
with p-value .0145
Significance
ANOVA
df
SS
MS
F
F
14730.01
Regression
2
29460.027
3
6.53861
0.01201
Residual
12
27033.306
2252.776
Total
14
56493.333
Coefficien
Standard
Upper
ts
Error
t Stat
P-value
Lower 95%
95%
Intercept
306.52619
114.25389
2.68285
0.01993
57.58835
555.46404
Price
-24.97509
10.83213
-2.30565
0.03979
-48.57626
-1.37392
Mr. Pranav Ranjan & Ms. Razia Sehdev
Advertising
74.13096
25.96732
2.85478 0.01449
17.55303
130.70888
ICTC, LPU Multicollinearity

# variation in the dependent variable. – Predictor variables may be incorrectly included or removed in stepwise regression. Mr. Pranav Ranjan & Ms. Razia Sehdev
ICTC, LPU Multicollinearity

# regression and latent root regression, can also be used. Mr. Pranav Ranjan & Ms. Razia Sehdev
ICTC, LPU

# Multicollinearity Diagnostics:  • Variance Inflation Factor (VIF) – measures how much the variance
of the regression coefficients is inflated by multicollinearity
problems. If VIF equals 0, there is no correlation between the
independent measures. A VIF measure of 1 is an indication of some
association between predictor variables, but generally not enough
to cause problems. A maximum acceptable VIF value would be 10;
anything higher would indicate a problem with multicollinearity.
• Tolerance – the amount of variance in an independent variable that
is not explained by the other independent variables. If the other
variables explain a lot of the variance of a particular independent
variable we have a problem with multicollinearity. Thus, small
values for tolerance indicate problems of multicollinearity. The
minimum cutoff value for tolerance is typically .10. That is, the
tolerance value must be smaller than .10 to indicate a problem of
multicollinearity.
Mr. Pranav Ranjan & Ms. Razia Sehdev
ICTC, LPU