P value

The P value or Probability value for a given statistical model is the probability of obtaining results as
extreme as the results of hypothesis test, assuming that the null hypothesis is true. It helps in
understanding if our results are statistically significant based on the significance level. The P-value of
each independent variable tests the null hypothesis that the variable has no correlation with the
dependent variable.

If the P-value of a variable is less than significance level, null hypothesis is rejected, and alternative
hypothesis is accepted. It means that changes in the independent variable are associated with
changes in the response at the population level. If the P-value is greater than the significance level,
there is insufficient evidence to reject the null hypothesis.

Multiple R

Multiple R is the correlation coefficient and is the square root of R 2. It tells how strong the linear
relationship is and measures the strength of the relationship between the relative movements of
two variables. The value of R ranges between -1 and 1. A correlation of -1 shows a perfect negative
correlation, while a correlation of 1 shows a perfect positive correlation. A correlation of 0 shows no
linear relationship between the movement of the two variables.

R2

Also known as the coefficient of determination, it is a statistical measure of how close the data is
fitted to the regression line or how many values fit the regression model. It is calculated by dividing
explained variation by total variation because it measures the proportion of the variance in the
dependent variable explained by an independent variable.

R2 = Explained Variation/Total Variation or 1- (Unexplained Variation/Total Variation)

For Example, if the value of R2 is 60%, it means that 60% of the variation in y values around the mean
is explained by the x values. The value of R 2 always lie between 0 to 100%.

T test

T test is used to determine whether there is a significant relationship between the means of two
population groups. It is used as a hypothesis testing tool and allows testing of an assumption
applicable to a population. A t-test looks at the t-statistic, the t-distribution values, and the degrees
of freedom to determine the statistical significance.

Mathematically, the t-test takes a sample from each of the two sets and establishes the problem
statement by assuming a null hypothesis that the two means are equal. Based on the applicable
formulas, certain values are calculated and compared against the standard values, and the assumed
null hypothesis is accepted or rejected accordingly.

T-test is used for small sample size, usually less than 30. For large sample size, z-test, chi square test
and f-test are used.

Intercept

The intercept, also known as the constant, is the point where the function crosses the Y axis.