In the last chapter, we looked at correlation analysis where we measured the linear relationship between pairs of variables. In this chapter we will use simple regression to develop a model describing the relationship between a single dependent variable and a single independent variable. This type of model is not frequently used in business, but understanding simple regression is a good way to begin our discussion of multiple regression.
Recall from high school geometry that the equation for a straight line can be written as follows:
Straight Line
Y = mX + b
In this equation, m is the slope of the line and b is the Y-intercept, or just intercept for short. Simple regression is a process for fitting a line to a set ...
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