The main idea of a multiple regression analysis is to understand the relationship between several independent variables and a single dependent variable. (Lind, 2004) A model of the relationship is hypothesized, and estimates of the parameter values are used to develop an estimated regression equation.(abyss.uoregon.edu) The multiple regression equation used to describe the relationship is: Y' = a + b1X1 + b2X2 + b3X3 + . + bkXk. It is used to estimate Y given selected X values and k independent variables. (Lind, 2004) There are two components of a multiple regression analysis that are important; the coefficient of correlation (multiple R) and coefficient of determination (R²). The coefficient of correlation is the degree to which two or more independent variables are related to the dependent variable. The coefficient of determination is "the proportion of the total variation in the dependent variable that is explained by the independent variable. It can assume any value between 0 and +1.00 inclusive." (Lind, 2004)

In this assignment, we are concern with the multiple R and R² of two sets data from the "Research Methods for Managerial Decisions" simulation exercise, in which we performed a multiple regression analysis on a company called Coffee Time. We needed to determine, which, produced a better multiple regression model, and how to further optimize this model. Then the team needed to answer the following scenario: Tourism is one consideration for Coffee Time's future. A survey of 1233 visitors to Mumbai last year revealed that 110 visited a small café during their visit. Laura claims that 10% of tourist will include a visit to a café. Use a 0.05 significance level to test her claim. Would it be wise for her to use that claim in trying to convince management to increase their advertising spending to travel agents?

Reference:

University of Oregon. Regression and correlation analysis. October 3, 2007....

...Chapter3
MultipleRegressionAnalysis: Estimation
Key drawback of SLR: all other factors affecting y are unrelated
with x, as is unrealistic.
Multipleregression allows us to control for many other
factors to explain dependent variable, which is useful both for
testing economic theories and for drawing the ceteris paribus
conclusion.
In addition, MR can incorporate fairly general functional form and
build better models...

...variables is 0, it means that the two variables aren’t related. – TRUE
2. In a simple regressionanalysis the error terms are assumed to be independent and normally distributed with zero mean and constant variance. – TRUE
3. The difference between the actual Y-value and the predicted Y-value found using a regression equation is called the residual (ε) – TRUE
4. In a multipleregressionanalysis...

...been retrieved from the case study titled “Housing Price” (Case #27 - Practical Data Analysis: Case Studies in Business Statistics- Marlene A. Smith & Peter G. Bryant)
The most important factor in determining the selling prices ofhouses is to know the features that drive the selling prices of the house. People tend to have more interest in houses with multiple bed rooms/bathrooms, fireplace, garage for multiple cars and location while choosing a...

...Multipleregression: OLS method
(Mostly from Maddala)
The Ordinary Least Squares method of estimation can easily be extended to models involving two or more explanatory variables, though the algebra becomes progressively more complex. In fact, when dealing with the general regression problem with a large number of variables, we use matrix algebra, but that is beyond the scope of this course.
We illustrate the case of two explanatory...

...Introduction
Team D will examine positive relationship of wages with multiple variables. The question is, are wages dependent on the gender, occupation, industry, years of education, race, years of work experience, marital status, and union membership. We will use the technique of linear regression and correlation. Regressionanalysis in this case should predict the value of the dependent variable (annual wages), using independent...

...Multipleregression, a time-honored technique going back to
Pearson's 1908 use of it, is employed to account for (predict)
the variance in an interval dependent, based on linear
combinations of interval, dichotomous, or dummy independent
variables. Multipleregression can establish that a set of
independent variables explains a proportion of the variance in a
dependent variable at a significant level (through a significance
test...

...Topic 4. Multipleregression
Aims
• Explain the meaning of partial regression coefficient and calculate and interpret multipleregression models • Derive and interpret the multiple coefficient of determination R2and explain its relationship with the the adjusted R2 • Apply interval estimation and tests of significance to individual partial regression coefficients d d l ff • Test the...

625 Words |
3 Pages

Share this Document

{"hostname":"studymode.com","essaysImgCdnUrl":"\/\/images-study.netdna-ssl.com\/pi\/","useDefaultThumbs":true,"defaultThumbImgs":["\/\/stm-study.netdna-ssl.com\/stm\/images\/placeholders\/default_paper_1.png","\/\/stm-study.netdna-ssl.com\/stm\/images\/placeholders\/default_paper_2.png","\/\/stm-study.netdna-ssl.com\/stm\/images\/placeholders\/default_paper_3.png","\/\/stm-study.netdna-ssl.com\/stm\/images\/placeholders\/default_paper_4.png","\/\/stm-study.netdna-ssl.com\/stm\/images\/placeholders\/default_paper_5.png"],"thumb_default_size":"160x220","thumb_ac_size":"80x110","isPayOrJoin":false,"essayUpload":false,"site_id":1,"autoComplete":false,"isPremiumCountry":false,"userCountryCode":"NL","logPixelPath":"\/\/www.smhpix.com\/pixel.gif","tracking_url":"\/\/www.smhpix.com\/pixel.gif","cookies":{"unlimitedBanner":"off"},"essay":{"essayId":33127276,"categoryName":"Periodicals","categoryParentId":"17","currentPage":1,"format":"text","pageMeta":{"text":{"startPage":1,"endPage":1,"pageRange":"1-1","totalPages":1}},"access":"premium","title":"The Main Idea of a Multiple Regression Analysis","additionalIds":[3,52,13,7],"additional":["Business \u0026 Economy","Business \u0026 Economy\/Organizations","Health \u0026 Medicine","Education"],"loadedPages":{"html":[],"text":[1]}},"user":null,"canonicalUrl":"http:\/\/www.studymode.com\/essays\/The-Main-Idea-Of-a-Multiple-124467.html","pagesPerLoad":50,"userType":"member_guest","ct":10,"ndocs":"1,500,000","pdocs":"6,000","cc":"10_PERCENT_1MO_AND_6MO","signUpUrl":"https:\/\/www.studymode.com\/signup\/","joinUrl":"https:\/\/www.studymode.com\/join","payPlanUrl":"\/checkout\/pay","upgradeUrl":"\/checkout\/upgrade","freeTrialUrl":"https:\/\/www.studymode.com\/signup\/?redirectUrl=https%3A%2F%2Fwww.studymode.com%2Fcheckout%2Fpay%2Ffree-trial\u0026bypassPaymentPage=1","showModal":"get-access","showModalUrl":"https:\/\/www.studymode.com\/signup\/?redirectUrl=https%3A%2F%2Fwww.studymode.com%2Fjoin","joinFreeUrl":"\/essays\/?newuser=1","siteId":1,"facebook":{"clientId":"306058689489023","version":"v2.8","language":"en_US"},"analytics":{"googleId":"UA-32718321-1"}}