LINEAR REGRESSION

ANALYSIS
LINEAR REGRESSION
› It is a basic and commonly used type of predictive
analysis.

› In simple regression analysis, only a straight – line

relationship between the two variables is examined: one
dependent variable and one dependent variable.
LINEAR REGRESSION
› Simple regression analysis considers a straight – line
relationship between two variables. This linear
relationship can be expressed in an equation in the form
Y = a + bx
where: Y = predicted value of the dependent variable
a = the y – intercept
b = the slope of the line
LINEAR REGRESSION
› For the slope of the line,

› For the y – intercept,

LINEAR REGRESSION
USES OF REGRESSION ANALYSIS
1. Determining the strength of predictors
2. Forecasting an effect
3. Trend forecasting
EXAMPLES
LINEAR REGRESSION ANALYSIS
A law enforcement officer obtained a data on the performance rating of the police
offices and the crime solution efficiency in their respective areas of
responsibilities for the last 6 months. Use the equation regression to predict the
crime solution efficiency of an area with the police office performance rating of
82.
Performance Rating
85 89 91 93 84 89
(X)
Crime Rate (Y) 89 90 92 92 88 90

SOLUTION:
MONTH X Y XY X2
1 85 89 7565 7225
2 89 90 8010 7921
3 91 92 8372 8281
4 93 92 8556 8649
5 84 88 7392 7056
6 89 90 8010 7921
Σx = 531 Σy= 541 Σxy= 47,905 Σx2= 47,053
A law enforcement officer obtained a data on the performance rating of the police
offices and the crime solution efficiency in their respective areas of
responsibilities for the last 6 months. Use the equation regression to predict the
crime solution efficiency of an area with the police office performance rating of
82.
Performance Rating
85 89 91 93 84 89
(X)
Crime Rate (Y) 89 90 92 92 88 90

SOLUTION: SLOPE OF THE REGRESSION LINE:

Σx = 531
Σy = 541
Σxy =47,905
Σx2 = 47,053 6 ( 47,905 ) −(531)(541)
n=6 𝑏=
6 ( 47,053 ) −¿ ¿

𝑏=0.4454 ≈ 0 .45
A law enforcement officer obtained a data on the performance rating of the police
offices and the crime solution efficiency in their respective areas of
responsibilities for the last 6 months. Use the equation regression to predict the
crime solution efficiency of an area with the police office performance rating of
82.
Performance Rating
85 89 91 93 84 89
(X)
Crime Rate (Y) 89 90 92 92 88 90

SOLUTION: Y-INTERCEPT
Σx = 531
𝑎=
∑ 𝑦
−b¿¿
Σy = 541 𝑛
Σxy =47,905
Σx2 = 47,053 541 531
n=6 𝑎= − (0.45)
6 6

𝑎=50.34
A law enforcement officer obtained a data on the performance rating of the police
offices and the crime solution efficiency in their respective areas of
responsibilities for the last 6 months. Use the equation regression to predict the
crime solution efficiency of an area with the police office performance rating of
82.
Performance Rating
85 89 91 93 84 89
(X)
Crime Rate (Y) 89 90 92 92 88 90

SOLUTION: REGRESSION EQUATION

a =50.34 𝑌 =𝑎 +𝑏𝑥
b = 0.45

𝑌 =50.34 +0.45 𝑥
SOLVE FOR THE CRIME SOLUTION EFFICIENCY IF THE
POLICE OFFICE PERFORMANCE RATING IS 82
𝑌 =𝑎 +𝑏𝑥
𝑌 =50.34 +0.45( 82)
𝑌 =87.24
A corporation owns several companies. The planner for the corporation believes the
amount spent on advertising can predict the total sales of the company. She gathers the
following sales and advertising information from several of the companies for 2015 (in
millions)
ADVERTISING 12.5 3.5 21.4 10.5 7.6
SALES 148 26 120 100 67
Develop the equation of the simple regression line to predict the sales from advertising
expenditures using these data

SOLUTION:
X Y XY X2
12.5 148 1850 156.25
3.5 26 91 12.25
21.4 120 2568 457.96
10.5 100 1050 110.25
7.6 68 516.8 57.76
Σx = 55.5 Σy= 462 Σxy= 6075.8 Σx2= 794.47
A corporation owns several companies. The planner for the corporation believes the
amount spent on advertising can predict the total sales of the company. She gathers the
following sales and advertising information from several of the companies for 2015 (in
millions)
ADVERTISING 12.5 3.5 21.4 10.5 7.6
SALES 148 26 120 100 67
Develop the equation of the simple regression line to predict the sales from advertising
expenditures using these data

SOLUTION: Σx = 55.5 Σy= 462 Σxy= 6075.8 Σx2= 794.47

SLOPE OF THE REGRESSION LINE:

5 (6075.8)−(55.5)( 462)
𝑏=
5 (794.47)− ¿ ¿

𝑏 =5.31
A corporation owns several companies. The planner for the corporation believes the
amount spent on advertising can predict the total sales of the company. She gathers the
following sales and advertising information from several of the companies for 2015 (in
millions)
ADVERTISING 12.5 3.5 21.4 10.5 7.6
SALES 148 26 120 100 67
Develop the equation of the simple regression line to predict the sales from advertising
expenditures using these data

SOLUTION: Σx = 55.5 Σy= 462 Σxy= 6075.8 Σx2= 794.47

Y-INTERCEPT

𝑎=
∑ 𝑦
−b¿¿
𝑛
462 55.5
𝑎= − (5.31)
5 5

𝑎=33.46
A corporation owns several companies. The planner for the corporation believes the
amount spent on advertising can predict the total sales of the company. She gathers the
following sales and advertising information from several of the companies for 2015 (in
millions)
ADVERTISING 12.5 3.5 21.4 10.5 7.6
SALES 148 26 120 100 67
Develop the equation of the simple regression line to predict the sales from advertising
expenditures using these data

SOLUTION: a = 33.46 b =5.31

REGRESSION EQUATION
𝑌 =𝑎 +𝑏𝑥

𝑌 =33.46 +5.31 𝑥