
 Overview
Correlation, the previous topic, is very closely related
to regression.
 Correlation
 Correlation is a statistical technique that
is used to measure and describe the strength
of the relationship between two (or more) variables.
 Regression
 Regression is a statistical technique that is
used to measure and describe the function
relating two (or more) variables.

Recall that we presented some examples that used variables
about characteristics of automobiles. We showed the relationship
between two of these variables, the Weight (in Tons) of
automobiles and the Horsepower of their engines.
Weight and Horsepower

Correlation: The relationship between
Weight and Horsepower is strong, linear, and
positive, though not perfect.
Pearson R = +.92
Regression: The straight line is
the regression line. It is the best straight
line in describing the relationship between
weight and horsepower. The line has the equation:
Wt = .37 + .02*Hpwr



 Correlation:
 Correlation tells us about the strength (and
shape) of the relationship between these two variables.
The Pearson correlation for weight and horsepower is
+0.92. This value tells us that there
is a very strong linear relationship between them. In
fact, the square of the correlation, which is 0.83,
tells us that 83% of their variance is shared between
them.
 Regression:
 Regression tells us about the nature of the function
relating the two variables. For linear regression, which
is what we consider here, regression fits a straight
line to the data so that the line best describes their
relationship. The regression line, as the line
is called, has been added to the scatterplot above.
 Regression Analysis
Regression analysis fits a straight line to the relationship
between the two variables. The line that is fit to the relationship
has certain properties.
The Regression Line
 is as close as possible, in a specific average least
squares sense, to all of the points.
 identifies the "central tendency" of the relationship
between the two variables, just as the mean identifies
the "central tendency" of a single variable.
 provides a simplified description  a model
 of the relationship between the two variables.
 gives us a way to predict values for the response
variable from values of the predictor variable.
Equation for a Straight Line
Any straight line is described by the linear equation
for two variables X and Y. The general equation for a
straight line is:
This equation shows that any straight line can be described
by just two values. These are its:
 Intercept: Intercept is denoted by a
in the equation. The intercept identifies the value
of Y when X is zero. Usually we don't interpret the
intercept.
 Slope: Slope is denoted by b in the
equation. The slope specifies how much the variable
Y will change when X changes by one unit.
Automobile Example
For the horsepower and weight example, the regression
line is
Weight = .37 + .02*Horsepower
We interpret the slope to mean that for every increase
of 1 horsepower, weight (in general) increases .02 tons
(.02*2000 = 40 pounds).
 Regression Example
We return to the GPA and Verbal SAT variables.
The scatterplot for these data is shown below:
Note: We are using Verbal SAT divided by 100 to clarify
the discussion of the slope (so that we can see a change
of one unit on the plot). This change in the variable (dividing
by a constant) does not change the relationship between
the two variables, and does not change either the correlation
or regression analysis.
ViSta Regres: The regression analysis is done
using ViSta's Regression Analysis module, which
can be done by clicking on the Regres button on
the workmap. The workmap and report that result are:
Report: The regression analysis report has three
major sections, each containing important information
about the analysis:
 Parameter Estimates: The parameter estimates
section of the report presents information about the
slope and intercept.
Under the "Estimate" column the report presents
the values for the intercept and slope of the line
that regression analysis estimates produces the best
fit to the points.
The intercept and slope are often called the "coefficients",
because they are the coefficients of the regression
line. They are called "estimates" (short for "estimated
coefficients") because they are estimates of what
the coefficients are in the population.
 Intercept:The report calls the intercept
the "Constant". Regression analysis estimates it
to be a=1.29.
This means that if we had someone with a Verbal
SAT of zero, we would estimate that person's GPA
to be 1.29.
Notice that this value doesn't make much sense!
In fact, the Intercept is usually not interpreted,
especially if a value of zero for the predictor
variable can't really be obtained in practice.
 Slope:The report presents the slope for
the "VerbSAT/100" variable. Regression analysis
estimates it to be b=0.32.
This means that for every point change in VerbSAT/100
(which corresponds to 100 points change in Verbal
SAT) we expect a change in GPA of 0.32.
Thus, for a person whose SAT is 100 points higher
than another person's, we would predict that the
first person's GPA would be .32 points higher
than the second person's. This makes good sense,
and is an important part of the results of regression
analysis.
 Regression Line: The equation for the regression
line is:
This regression line has been added to the scatterplot
below. Notice that it goes up .32 GPA unit for each
VerbSAT/100 unit that we move to the right.
 Std. Error: The report has a column labeled
Standard Error. This column presents the standard
errors of the estimated coefficients. This measures
the stability of the estimates.
Note: This is not what the book
calls the "Standard Error of Estimate". That value
is presented below by the name "Sigma Hat (RMS
Error)".
 tratio, PValue: These provide a significance
test for each of the estimated coefficients. The
test is of the null hypothesis that the tested coefficient
(intercept or slope) is zero.
Note that the question of whether the slope
is zero gets at the question of the nature of
the relationship between the two variables. This
is important because the question is: Does one
variable change when the other does? (Note that
zero intercept makes little interpretive sense
and the test is usually ignored).
 Summary of Fit
 R Squared: This is the square of the correlation
between the two variables. It is the coefficient
of determination that measures the variance shared
between the variables.
 Sigma Hat (RMS Error): This is what the
books calls the "Standard Error of Estimate". It
specifies the RootMeanSquared (RMS) average 
or standard  distance between the points and
the line, measured vertically.
 Analysis of Variance: An analysis of variance
is reported that tells us whether the entire regression
model significantly fits the response variable. The
entire model includes both the slope and intercept simultaneously.
The null hypothesis is that there is no relation between
the two variables. The FRatio and PValue summarize
this test's results.
Visualization: ViSta DOES (last year it didn't)
produce a visualization for simple regression. Here it is:
See the help files
for this visualization.
