Stat 112 Lecture 14 Notes.ppt

Stat 112: Lecture 14 Notes Finish Chapter 6: Checking and Remedying Constant Variance Assumption (Section 6.5) Checking and Remedying Normality Assumption (Seciton 6.6) Outliers and Influential Points (Section 6.7) Homework 4 is due next Thursday. Please let me know of any ideas you want to discuss for the final project. Assumptions of Multiple Linear Regression Model Linearity: Constant variance: The standard deviation of Y for the subpopulation of units with is the same for all subpopulations. Normality: The distribution of Y for the subpopulation of units with is normally distributed for all subpopulations. The observations are independent. Checking Constant Variance Assumption Residual plot versus explanatory variables should exhibit constant variance. Residual plot versus predicted values should exhibit constant variance (this plot is often most useful for detecting nonconstant variance) Heteroscedasticity When the requirement of a constant variance is violated we have a condition of heteroscedasticity. Diagnose heteroscedasticity by plotting the residual against the predicted y. How much traffic would a building generate? The goal is to predict how much traffic will be generated by a proposed new building of 150,000 occupied sq ft. (Data is from the MidAtlantic States City Planning Manual.) The data tells how many automobile trips per day were made in the AM to office buildings of different sizes. The variables are x = “Occupied Sq Ft of floor space in the building (in 1000 sq ft)” and Y = “number of automobile trips arriving at the building per day in the morning”. Reducing Nonconstant Variance/Nonnormality by Transformations A brief list of transformations y’ = y1/2 (for y 0) Use when the spread of residuals increases with y’ = log y (for y 0) Use when the spread of residuals increases with Use when the distribution of the residuals is skewed to the right. y’ = y2 Use when the