Multiple regression

Multiple regression is a
statistical technique through
which one can analyze the
relationship between a
dependent or criterion variable
and a set of independent or
predictor variables.
 Assumptions for
Multiple Regression
Linearity: Relationship between dependent and independent
variables is crucial (ANOVA)

Homoscedasticity: Levene Test for Homogeneity of

Variance

Independence of error terms: Each predicted

value is independent. Violations will be indicated by a consistent pattern
in the residuals. Durbin-Watson statisticusedtodetectthepresenceof
autocorrelation(Test for serial correlation of adjacent error terms, and, if
significant, indicates non-independence of errors).

Normality of the error distribution: errors of

prediction (differences between the obtained and predicted dependent
variable scores) are normally distributed
 Durbin-Watson
Statisticusedtodetectthepresenceofautocorrelation.

statisticrangesinvaluefrom0to4

Avalue near 2 indicates non-autocorrelation

Avalue toward 0 indicates positive autocorrelation

Avaluetoward 4 indicates negative

autocorrelation
 R-square
coefficient of determination
If R-square is 1 (perfect linear
relationship)
If R-square of 0 (no linear relationship
between the predictor and dependent
variables)
 ANOVA
Analysis of variance
A statistical model used to measure "variation"
among and between groups

To test the hypothesis of no linear

relationship i.e R=0

A statistical testof whether or not themeansof

several groups are equal, and therefore
generalizes thet-testto more than two groups.
 F Value in ANOVA
The F value serves to test how well the
regression model fits the data.

If F statistics is small that Hypothesis

that R square=0 is rejected.

The hypothesis that there is no linear

relationship between the predictor and
dependent variables is rejected
 Multicollinearity
Refer to a situation in which the
independent/predictor variables are highly
correlated

There is overlap or sharing of predictive

power.

In order to get the significance of independent

variable multicollinearity is used.
 Check for
Multicollinearity
Tolerance=1-R2
It measures that which variable in percentage has more
effect among other independent variables.

If Values are greater than 0.10 it needs no further

investigation

VIF (variance inflation factor)

1/tolerance
If VIF value less than 10 then it needs not to be further
investigation.
 Check for
Multicollinearity
Another Way is checking Collinearity diagnostic
table

15 indicates a possible multicollinearity

problem
30 suggests a serious multicollinearity problem
 Beta Value
are the coefficients of the predictor
variables when all variables are expressed
in standardized form (z-score).

Identifying Independent Relationships

Beta value shows the strength of their

independent relationships