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Multi-Variable Linear Regression Lesson #6 Multi-Variable Linear Regression Method 1 Copyright 2010 DeepThought, Inc.
Multi-Variable Linear Regression Model Introduction ,[object Object]
Estimates a linear equation based upon multiple independent variables, not just one, i.e. time
Uses the estimated linear equation to forecast future values
Method format:
Y = a + b × x1 + c × x2 + d × x3 + …2 Copyright 2010 DeepThought, Inc.
Multi-Variable Linear Regression Model Details ,[object Object]
Fits a linear equation to data
Estimating a linear equation which minimizes the errors between actual data points and model estimates
When to use method
More then one variable impacting the dependent variable
When not to use
Creating simple models3 Copyright 2010 DeepThought, Inc.
Multi-Variable Linear Regression Forecasting Steps Set an objective Build model Evaluate model Use model 4 Copyright 2010 DeepThought, Inc.
Multi-Variable Linear Regression Objective Setting ,[object Object]
Multi-linear regression allows to test whether a line through each of the independent variablesworks as a model. Objectives should take that principal under consideration
Example objectives for retail sales (see next slide):
Test if retail sales can be fit to a multivariable linear regression model

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