HOW WOULD YOU KNOW IF THE REGRESSION RESULTS ARE GOOD PREDIC

HOW WOULD YOU KNOW IF THE REGRESSION RESULTS ARE GOOD PREDICTOR OF DEPENDENT VARIABLE? WHAT DECISIONS COULD BE MADE OR INSIGHTS PROVIDED THROUGH THE REGRESSION RESULTS?

Solution

For effective regression equation first plot all the data given. If the scatter plot shows linear trend then fix a linear equation otherwise exponential. If this is correctly selected then we can fit the curve using least squares method.

Regression analysis helps the relation between the independent and dependent variables whether they are associated or not , if associated whether positive or negative, whether strong or weak.

Also regression is used to predict the future values of dependent variable for a given independent variable x and also some times x from y.

Normally the data tends to follow a pattern and that pattern is scientifically determined by regression equation.

For linear equations, slope test can be done to test the accuracy of the regression line.