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Simple Linear Regression Model

The simple linear regression model establishes a relationship between a dependent variable y and an independent variable x through the equation y = b0 + b1*x + e. Coefficients b0 and b1 are estimated using the Least Squares Method to minimize the sum of squared residuals. The slope indicates the change in y for a one-unit change in x, while the intercept represents the expected value of y when x is zero.

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14 views2 pages

Simple Linear Regression Model

The simple linear regression model establishes a relationship between a dependent variable y and an independent variable x through the equation y = b0 + b1*x + e. Coefficients b0 and b1 are estimated using the Least Squares Method to minimize the sum of squared residuals. The slope indicates the change in y for a one-unit change in x, while the intercept represents the expected value of y when x is zero.

Uploaded by

bmalavika970
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Simple Linear Regression Model

1. Model Equation

Model Equation:

A simple linear regression model relates a dependent variable y to one independent variable x as:

y = b0 + b1*x + e

Where:

- y: Dependent variable

- x: Independent variable

- b0: Intercept (value of y when x = 0)

- b1: Slope (change in y for a one-unit change in x)

- e: Error term (captures variability not explained by the model)

2. Estimating Coefficients

Estimating the Coefficients b0 and b1:

We estimate the coefficients using the Least Squares Method, which minimizes the sum of squared residuals:

Residual = yi - (b0_hat + b1_hat*xi)

Objective: Minimize

S = Sum[(yi - b0_hat - b1_hat*xi)^2]

Solving gives:

b1_hat = Sum[(xi - x_mean)*(yi - y_mean)] / Sum[(xi - x_mean)^2]


Simple Linear Regression Model

b0_hat = y_mean - b1_hat*x_mean

3. Interpretation

Interpretation of Coefficients:

Suppose we are analyzing the relationship between hours studied (x) and test scores (y):

- b1_hat = 5: For every additional hour studied, the test score increases by 5 points.

- b0_hat = 50: If a student studies 0 hours, their predicted score is 50 (may or may not be meaningful).

Summary:

- The simple linear regression model provides a linear relationship between two variables.

- Coefficients are estimated by minimizing the sum of squared errors using Least Squares Method.

- The slope represents the effect of the independent variable on the dependent variable.

- The intercept represents the expected value of the dependent variable when the independent variable is

zero.

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