In business, we build regression models to accomplish something. Typically, either we wish to explain the behavior of the dependent variable or we wish to forecast the future behavior of the dependent variable based on the expected future behavior of the independent variables. Often, we wish to do both. In order to accomplish this, we select variables that we believe will help us explain or forecast the dependent variable. If the dependent variable were sales, for example, then we would select independent variables like advertising, pricing, competitor actions, the economy, and so on. We would not select independent variables like supplier lead time or corporate income tax rates because these variables are unlikely to ...
Get Business Applications of Multiple Regression, Second Edition now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
