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Linear Regression

Linear regression is a statistical method used to study the relationship between two continuous variables, aiming to predict the dependent variable by minimizing the sum of squared errors. It is widely applicable across various fields such as economics and business, serving as a foundational concept for more complex machine learning techniques. The method relies on several assumptions and is limited to linear relationships, making it essential to understand when and how to apply it effectively.

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2 views

Linear Regression

Linear regression is a statistical method used to study the relationship between two continuous variables, aiming to predict the dependent variable by minimizing the sum of squared errors. It is widely applicable across various fields such as economics and business, serving as a foundational concept for more complex machine learning techniques. The method relies on several assumptions and is limited to linear relationships, making it essential to understand when and how to apply it effectively.

Uploaded by

jojojonelm
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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CHAPTER 3 - Linear Regression

INTRODUCTION

Linear regression is a fundamental concept in statistics and machine learning. It is a


statistical method that allows us to study relationships between two continuous (quantitative)
variables. One variable, denoted x, is regarded as the predictor, explanatory, or independent
variable. The other variable, denoted y, is regarded as the response, outcome, or dependent
variable. The goal of linear regression is to find the best fit line that can accurately predict the
output for the continuous dependent variable. This is done by minimizing the sum of the squares
of the residuals, also known as the sum of squared errors.

Linear regression is widely used in various fields, including economics, business,


engineering, and more. It is a powerful tool for understanding and predicting numerical data, and
is a foundational concept for more complex machine learning and statistical techniques. Linear
regression models have several applications in real life, from predicting health outcomes to
estimating sales in business. They are also a starting point for many statistical modeling and
predictive analytics endeavors.

While linear regression is a simple concept, it forms the basis for understanding more
complex machine learning algorithms. It is a stepping stone in the field of artificial intelligence and
machine learning.

TAKEAWAY

1. Regression is a statistical tool used to understand the relationship between two variables.
It’s applicable when both the dependent variable (DV) and the independent variable (IV)
are numerical. This is essential for those conducting research that involves analyzing
variable relationships.
2. The scatterplot shows a positive correlation between IQ (age) and income, indicating that
higher IQ (age) scores are associated with higher incomes. The graph makes it clear to
see this pattern at a glance. This helps us quickly understand the relationship between
age and income.
3. Shows three types of relationships between two things. (1) Positive Correlation - when
one thing increases, the other does too; (2) Negative Correlation - when one thing
increases, the other decreases; and (3) No Correlation - there’s no clear pattern between
the two things.
4. In displaying the Data, it's important to use scatterplots to check if things are related in a
straight-line way. Non-Linear Example - the graph shows body fat percentage and heart
failure chance don't have a straight-line relationship. Linear Regression - because the
relationship isn't straight-line, using linear regression doesn't make sense here. It helps us
understand when to use certain types of statistical analysis.
5. It predicts one thing (like income) based on another (like IQ). The equation of a linear
regression model is y = a + b * X + E, where:
• Y: What we want to predict (like income).
• X: What we use to predict (like IQ).
• a: The starting point of the prediction.
• b: How much change in X affects Y.
• E: The part of Y that can’t be predicted by X.

This helps us understand how changes in one thing can affect another.

6. Multiple linear regression is an extension of simple linear regression used to predict an


outcome variable (Y) based on multiple distinct predictor variables (X)
7. Linear regression is used in business, economics, life sciences, social sciences, and many
other fields.
8. Linear regression only looks at linear relationships between dependent and independent
variables. It does not support anything else.
9. Linear regression makes several assumptions:
• Linearity: The relationship between x and the mean of y is linear.
• Homoscedasticity: The variance of residual is the same for any value of x.
• Independence: Observations are independent of each other.
10. Hypothesis Testing is a method to check if there's a real effect between two things (like a
new study method and exam scores). (Ho): It assumes there's no effect (the new study
method doesn't change exam scores). (H1): It suggests there is an effect (the new study
method could improve exam scores). If we have enough evidence, we can say the new
study method does help with exam scores. This process helps us understand if new
methods or treatments have a real impact.

CONCLUSION

Linear regression is a powerful, simple, and widely used method in the field of statistics and
machine learning. It provides a method to model a relationship between two sets of variables.
However, like all methods, it has its limitations and assumptions that must be considered.

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