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Lecture 20

Chapter 7: Correlation and Simple Linear Regression

Lecture 20
Use of Minitab in regression

� Entering the data

� Running the regression
� Interpeting the output

Lecture 20
7.4: Model checking and transformations
how to make sure the
test is right?

Model: yi = β0 + β1 xi + εi main assumption: E1

� Model assumptions:
� εi s are independent.
� εi s have mean 0.
� εi s have constant variance.
� εi s are normally distributed.
� Does the fitted model satisfy all the assumptions?
Checking done based on residual plots.

Lecture 20
Model checking contd.

� Residuals: ei = yi − ŷi ; i = 1, . . . , n.
� Plot residual (ei ) vs. fitted (ŷi ) values.
� Desirable to have
� No trend or pattern – should be haphazard around the y = 0
� Vertical spread does not change over the x-axis.

Lecture 20
Residual plots

best plot constant variance set

Ei is not working not
good cuz varience are


following a pattern not there is a outlier not

good it is supposed to good if get rid of
be random outlier then its good

Lecture 20
Model checking contd.

� If assumptions are not satisfied, work with transformed data

(e.g. ln y , y a , ln x, x b ).

Lecture 20
Model checking contd.

� Outliers: Points detached from the bulk of the data.

� Influential points: Removal of them causes substantial change
point have lot
in the regression line.
of influence
� Usually points with unusual x-values are influential. on line
� A time order plot is a plot of residual vs. observation number
— should be haphazard (no pattern).
� Normal probability plot of the residuals —- should be close to
a straight line. should be a straight line

stat >regression >regression > Response: Y:

Predictor: X > graph > select: 4 in 1>

Lecture 20