Lesson 27 Multiple Regression Inference and Model Building.pptVIP

Lesson 27Multiple Regression: Inference and Model Building Flexibility Learn…. To assess model usefulness with F-test and t-tests. To assess model appropriateness with residual analysis To build models to include qualitative variables Section 12.3 How Can We Use Multiple Regression to Make Inferences? Inferences about the Population Assumptions required when using a multiple regression model to make inferences about the population: The regression equation truly holds for the population means This implies that there is a straight-line relationship between the mean of y and each explanatory variable, with the same slope at each value of the other predictors Inferences about the Population Assumptions required when using a multiple regression model to make inferences about the population: The data were gathered using randomization The response variable y has a normal distribution at each combination of values of the explanatory variables, with the same standard deviation Do the Explanatory Variables Collectively Have an Effect? Example: With 3 predictors in a model, we can check this by testing: Do the Explanatory Variables Collectively Have an Effect? The test statistic for H0 is denoted by F Do the Explanatory Variables Collectively Have an Effect? When H0 is true, the expected value of the F test statistic is approximately 1 When H0 is false, F tends to be larger than 1 The larger the F test statistic, the stronger the evidence against H0 Summary of F Test That All βeta Parameters = 0 Assumptions: Multiple regression equation holds, data gathered randomly, normal distribution for y with same standard deviation at each combination of predictors Summary of F Test That All βeta Parameters = 0 Test statistic: Summary of F-Test That All βeta Parameters = 0 P-value: Right-tail probability above observed F-test statistic value from F- distribution with: df1 = number of explanatory variables df2 = n – (number of parameters in regression equation) Su