Professional Documents
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3rd Assignment
3rd Assignment
School of Business
Administration and Management
Academic –Block (H. H CAMPUS)
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I certify that this assignment is my/our own work in my/our own words. All sources have been
acknowledged and the content has not been previously submitted for assessment to School of Business
Administration and Management, University of Gujrat or any other institute. I also confirm that I have kept
a copy of this assignment.
Signed: ..........................................
This assignment must be submitted in hard copy, either (1) to CR or GR, or (2) by Person to the
Office S-209 or (3) by post, ensuring that either the assignment or envelope is date stamped.
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Table of Contents
Objective 1
Two Independent Sample t-Test (Two Variables and both are Independent)
Objective 2
Simple Regression
Multiple Regression
Coefficient of Determination
Interpretation of Results
Objective 3 Objective 4
Interpretation of Results
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Parametric Test vs Non Parametric Test:-
The test which follows some distribution is called parametric Test whereas the test which not follows any
distribution is called non parametric test.
Well known distributions of Normal data are Z, T and F. The basis condition for using parametric test is
that the data should follow some distribution.
Procedure
For the stated task we run normality test by using explore option which available in sub menu of descriptive
statistics under the head of analysis. Normality shall be checked only for the Quantitative Data
For checking the Normality of the data we use following Descriptive and Inferential tests: -
Graphical Approach: - Graphically we use histogram, P-P plot / Q-Q Plot, Stem & Leave Plot, Box Plot
Numerical Approach: Numerically we use Mean, Median, Mode, Skewness and Kurtosis.
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The output files shows the following results :-
One-Sample Statistics
The above table shows that there are 398 observations for MPG with Mean of 23.51 with 7.816 standard
deviation.
One-Sample Test
Test Value = 25
The above table shows that the sample t-test value is -3.791 which the statistic of the formula the average
test value is 25 whereas the test value is has mean difference of -1.485 which shows that the distribution is
not normal. df is 397 which is equal to n-1 ( 398-1) so the total no. of observations are 398.
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Distribution of the Histogram shows that the distribution is not symmetric but positively / right skewed.
The Q-Q plot show that the data is not on the fitted line especially the starting and ending points are not on
the line so the distribution is not normal..
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Another view portrays that the data is not only the straight line and the data is scattered and deviated from
the normality.
Cases
The normality test is run on miles per gallon. The table of case processing indicating that for this test 406
observations Or vehicle are used for the analysis but late on it is observed that 2.% vehicle information on
MPF is not stated and the valid information is only available on 398 units.
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Descriptive
Median 23.00
Variance 61.090
Minimum 9
Maximum 47
Range 38
Interquartile Range 12
It is observed though descriptive analysis that average Mile Per Gallon of 398 vehicles is 23.5MPG with
variation of 7.81 (SD). The minimum MPG for vehicle observed is 9 and maximum MPG is 47. The Median
of MPG varies from average 1.5 MPG. As the averge varies with each other which is an indication that
distribution of data has not symmetrical pattern but we further investigate the pattern though skewness and
kurtosis for confirmation, the both statistics also indicate a skewed pattern in the distribution of Data.
Further through graphical approach to use Histogram and Normal Q-Q Plot for investigation. The vertical
bars of the Histogram make along a tail on right side from the average 23.51. and Normal Q-Q plot also not
fit expected numbers on the fitted line on both tails. The above table shows that MPG mean is 23.51 with
standard deviation 7.816. which shows that the data is not symmetrical and the distribution is not normal as
it has Std.Dev of 7.816 for this sample. Also the value of skewness is .457 which is > 0 = positively skewed.
Similarly, the kurtosis has the value of -.511 which is not equal to 3 and less than 3 which shows that the
distribution is not normal.
Tests of Normality
Kolmogorov-Smirnova Shapiro-Wilk
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The table contain the shapiro wilk statistic value with degree of freedom and p-vale. As the No. of
observations are under 2000 therefore the results shall be extracted from Shapiro Wilk. The significance is
.000 = P-value which is less than level of significance (α). So we will reject Ho (Test Distribution is
Normal) and will accept HA (Test Distribution in Not Normal).
Parametric Test
After checking the normality, the Parametric tests are applied. Following four types of test are used in
parametric Tests: -
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The output file shows the following results
One-Sample Statistics
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The statistics shows that there are 398 observations against MPG with 23.51 mean and 7.816 std. deviation.
One-Sample Test
Test Value = 25
The above table showed that there is not much difference between claimed and Sample Mean but the
variation as mentioned in table one is 7.816 which may vary by sample to sample so we can conclude that
data dis not support our hypothesis and the results are significant (Ho is rejected).
N Correlation Sig.
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Paired Samples Test
Paired Differences
95% Confidence
Interval of the
Difference
Std. Std. Error Sig. (2-
Mean Deviation Mean Lower Upper t df tailed)
Descriptive Statistics
Ranks
Ties 0c
Total 101
c. 8 CYL = 4 CYL
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Test Statisticsb
8 CYL - 4 CYL
Z -8.728a
ANOVA
Multiple Comparisons
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5 Cylinders -7.381* 2.778 .008 -12.84 -1.92
Ranks
Number of
Cylinders N Mean Rank
5 Cylinders 3 259.83
6 Cylinders 84 150.21
Total 397
Test Statisticsa,b
Chi-Square 282.560
df 4
Cases
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Descriptives
Median 2.2340E3
Variance 1.234E5
Minimum 1613.00
Maximum 3270.00
Range 1657.00
X1
X1 Stem-and-Leaf Plot
2.00 16 . 14
5.00 17 . 56799
12.00 18 . 002233334567
25.00 19 . 1233445556666777788888999
17.00 20 . 00122344455667778
30.00 21 . 001122222233333445555566678899
26.00 22 . 00011122222334455666677899
16.00 23 . 0001235777788999
10.00 24 . 0000335689
16.00 25 . 0011244456677889
17.00 26 . 00122333466777779
10.00 27 . 0122344599
7.00 28 . 0056679
6.00 29 . 034557
3.00 30 . 039
2.00 31 . 59
3.00 32 . 357
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Case Processing Summary
Cases
Descriptives
Median 2.2340E3
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Variance 1.234E5
Minimum 1613.00
Maximum 3270.00
Range 1657.00
Tests of Normality
Kolmogorov-Smirnova Shapiro-Wilk
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Objective 2
Multiple Regression
Coefficient of Determination
Interpretation of Results
Simple Regression
Regression is a statistical measure used in finance, investing and other disciplines that attempts to determine
the strength of the relationship between one dependent variable (usually denoted by Y) and a series of other
changing variables (known as independent variables).
To find out the relationship between one dependent variable due to the change in independent variable.
Just like if we want to know the relationship between Store Size with store sales.
Sometimes independent variables link with each other’s therefore, they don’t effect dependent variable or
we cannot calculate the actual change of dependent variable. To overcome this we use only independent
variables which have not relate with each other.
Y= βo + βiXi+ €i
Y=sales, responses (dependent Variable)
βo = Intersect
βi = Rate of change
Xi = Control, Independent Variable
€i= Random Error
Y= 100+150 x 7=
20
Sales Sample
Sr.No. Store Size X
Result
Y
1 850 5
2 1150 7
3 1600 10
4 1900 12
5 2350 15
6 3100 20
7 3850 25
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Multiple Regression
Y= βo + βiXi+ βiiXii+…………+ βkXk+€i
Hypothesis
Ho = βi= βii = βiii= Bk = 0 (coefficient does not play role)
Ha= at least on Bi varies (play some role)
Coefficient of Determination = R2
How much variation of dependent variable is due to independent variable?
IF
R2 = 0 ( No Role)
R2= 1 (Too much /Complete Role)
R2 > .8 to .9 perfect for forecasting
Regression In SPSS
To run the regression analysis in the SPSS we will select the Regression button under the
Analyze menu and will select linear. Analyze Regression Linear
Statistics Confidence Interval, Estimate, Descriptive, collinearity Diagnostic
and Durban Watson. And from Analyze-Regression-Linear-Plot-Dependent-
Histogram & Normal Probability Plot.
Also we will shift Dependent (MPG) and Independent Variables (Horsepower and
vehicle weight) accordingly before applying any test.
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Descriptive Statistics
Descriptive Statistics is showing that the data is consists of 392 vehicles/ observations (population) out of
which the MPG mean is 23.45 with SD 7.805 similarly the Vehicle weight has a mean of 2967 and
horsepower has a mean of 104.21 with SD of 38.233.
Correlations
Vehicle Weight
Miles per Gallon (lbs.) Horsepower
Correlations table is showing the relation between MPG, Vehicle Weight and Horsepower also it shows that
there is relation between MPG, Horsepower and Vehicle Weight. MPG has a high degree negative relation
with vehicle weight and horsepower. Also the significant values (i-tailed) are less than the P-Value α so we
will reject Ho and accept HA.
Variables Entered/Removedb
Variables Variables
Model Entered Removed Method
1 Horsepower,
Vehicle Weight . Enter
(lbs.)a
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Model Summary
The Results of above model show that the R=.822 which shows that independent variables jointly effected
by the dependent variables (joint relation between dependent and independent variables) whereas the value
of R square shows the amount of variance in the Dependent variable that is accounted for or explained by
the Independent Varibables. It also means that vehicle weight and Horsepower explain 67 % about MPG.
The value of Durbin- Watson statistics is .819 which is between 0.5 to 2.5 so there is no issue of
autocorrelation. The thumbs rule for Durbin Watson is that it should not be over 2.5 otherwise there will be
issue of autocorrelation.
ANOVAb
The model of Analysis of Variance shows that the model has the power to explain the relationship between
Independent and Dependent Variable. Also the sig. value is .000 which is less than the P-value so on the
basis of this we can reject Ho as well and will conclude that coefficient plays role in the model.
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Coefficientsa
Standardize
Unstandardized d 95% Confidence Collinearity
Coefficients Coefficients Interval for B Statistics
Vehicle Weight
-.005 .001 -.551 -9.818 .000 -.006 -.004 .265 3.770
(lbs.)
Horsepower -.061 .011 -.299 -5.335 .000 -.084 -.039 .265 3.770
The most interesting and most important model is the above coefficient model. It shows the relations
between Independent and dependent variables. The unstandardized coefficient predicts that .005 change in
MPG will occur in one additional unit of vehicle weight (increase / decrease) in the opposite direction as the
relation is negative remaining other independent variables constant. Similarly, MPG will change .061
increasing /decreasing in one unit change in Horsepower of the vehicle remaining other independent
variables constant.
The Result of VIF (variance Inflation Factor) shows that there is no issue of multi-collinearity as the value
of VIF is only 3.70 and the rule of thumb is VIF => 10 then there will be an issue of multi-collinearity
whereas when the value of VIF <10 then there is no issue of multi-collinearity.
Collinearity Diagnostics
Variance Proportions
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Residuals Statistics
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Histogram shows the distribution is not symmetrical but is negatively skewed.
The scattered diagram shows that there is –ve relationship between MPG and Horsepower as well as MPG
and Vehicle Weight
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Objective 3
Logistic Relation
Discriminants Analysis
Odds
Interpretation of Results
Logistic Relation
The Linear regression only deals with continuous variables but in real world we have to deal with dependent
variables which have qualitative in nature having two categories, like- dislike, yes-no, accept-reject etc. the
solution of these problems is logistic regression.
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