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Curve Estimation Explained

A brief step-by-step

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Gerónimo Maldonado-Martínez
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82 views

Curve Estimation Explained

A brief step-by-step

Uploaded by

Gerónimo Maldonado-Martínez
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Curve Estimation

The Curve Estimation procedure allows you to quickly


estimate regression statistics and produce related plots for
11 different models. Curve Estimation is most appropriate
when the relationship between the dependent variable(s)
and the independent variable is not necessarily linear.

Select Predicted values
and Residuals in the Save
The F, df1, df2, and Sig. columns summarize the results of the F
test of model fit. The significance value of the F statistic is less
than 0.05 for both models, which means that the variation
explained by each model is not due to chance. The R Square
statistic is a better measure of the strength of relationship.
The R Square statistic is a measure of the strength of
association between the observed and model-predicted
values of the dependent variable. The large R Square
values indicate strong relationships for both models. The
R Square for the Quadratic model is larger, though it is
not clear whether this is due to the Quadratic model
capitalizing on chance with an extra parameter .
Now produce a plot showing the residuals distribution
Now produce a plot showing the residuals distribution
Select Quadratic, in
additional to Linear, as
Select SAVE
Select Predicted values
and Residuals in the Save
The Linear model states that the expected sales is equal to
6.584 + 1.071*advertising spending. The b1 value greater than
1 suggests that you should spend as much on advertising as
you can, because you'll make that investment back and more in
sales. Practically, this doesn't make much sense because you
you can, because you'll make that investment back and more in
sales. Practically, this doesn't make much sense because you
know that the market has a saturation point for advertising.
The Quadratic model states that the expected sales is equal to
3.903 + 2.854*advertising spending - 0.245*squared
advertising spending. The negative value for b2 means that this
model suggests that past a certain point, increased advertising
would actually decrease sales. More exactly, increased
advertising past 2.854/(2 * 0.245) = 5.824 will decrease
The F, df1, df2, and Sig. columns summarize the results of the F
test of model fit. The significance value of the F statistic is less
than 0.05 for both models, which means that the variation
explained by each model is not due to chance. The R Square
statistic is a better measure of the strength of relationship.
The curve fit chart gives you a quick visual assessment of the fit of each
model to the obversed values. From this plot, it appears that the
Quadratic model better follows the shape of the data. In particular, the
linear model seems to overestimate sales for cases with small or large
values of Advertising spending and underestimate sales for cases with
medium values of Advertising spending. As a further visual check, you
should look at plots of the residuals versus predicted values for each
distribution
distribution
This plot reinforces your suspicions from the curve fit plot. There is a
clear "inverted U" shape to the points, which means that there is a
pattern in the data that is not captured by the Linear model.

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