simple linear regression equation statistics

Let’s see the simple linear regression equation. In our example, above Scatter plot shows how much online advertising costs affect the monthly e-commerce sales. The Scatter plot shows how much one variable affects another. Now, let’ see how the Scatter diagram looks like:

We will use the above data to build our Scatter diagram. So, if we want to predict the monthly e-commerce sales from the online advertising costs, the higher the value of advertising costs, the higher our prediction of sales. The positive correlation means that the values of the dependent variable (y) increase when the values of the independent variable (x) rise. We can see that there is a positive relationship between the monthly e-commerce sales (Y) and online advertising costs (X). The following table represents the survey results from the 7 online stores. Your task is to find the equation of the straight line that fits the data best. You have the survey results for 7 online stores for the last year. You have to study the relationship between the monthly e-commerce sales and the online advertising costs. Β 1 – the regression coefficient (shows how much Y changes for each unit change in X) Β 0 – is a constant (shows the value of Y when the value of X=0) X – the value of the independent variable,

The other variable (Y), is known as dependent variable or outcome.Īnd the simple linear regression equation is:.

One variable (X) is called independent variable or predictor.

Simple linear regression allows us to study the correlation between only two variables: Simple Linear Regression Examples, Problems, and Solutions

Here, we concentrate on the examples of linear regression from the real life. In our previous post linear regression models, we explained in details what is simple and multiple linear regression.

Simple linear regression examples: problems with solutions.

Apart from business and data-driven marketing, LR is used in many other areas such as analyzing data sets in statistics, biology or machine learning projects and etc. Many of simple linear regression examples (problems and solutions) from the real life can be given to help you understand the core meaning.įrom a marketing or statistical research to data analysis, linear regression model have an important role in the business.Īs the simple linear regression equation explains a correlation between 2 variables (one independent and one dependent variable), it is a basis for many analyses and predictions.

Simple linear regression equation statistics