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12. Multiple Regression Models Learning Objectives 1. Explain the Linear Multiple Regression Model 2. Test Overall Significance 3. Describe Various Types of Models 4. Evaluate Portions of a Regression Model 5. Interpret Linear Multiple Regression Computer Output 6. Describe Stepwise Regression 7. Explain Residual Analysis 8. Describe Regression Pitfalls Most practical applications of regression analysis utilize models that are more complex than the simple straight-line model. For example, a realistic probabilistic model for reaction time would include more than just the amount of a particular drug in the bloodstream. Factors such as age, a measure of visual perception, and sex of the subjects are a few of the many variables that might be related to reaction time. Regression Modeling Steps 1. Hypothesize Deterministic Component 2. Estimate Unknown Model Parameters 3. Specify Probability Distribution of Random Error Term Estimate Standard Deviation of Error 4. Evaluate Model 5. Use Model for Prediction Estimation Probabilistic models that include more than one independent variable are called multiple regression models. The general form of these models is The dependent variable is now written as a function of k independent variables, The random error term is added to make the model probabilistic rather than deterministic. The value of the coefficient determines the contribution of the independent variable , and is the y-intercept. The coefficients are usually unknown because they represent population parameters. Actually, can be functions of variables as long as the functions do not contain unknown parameters. For example, the reaction time, Y, of a subject to a visual stimulus could be a function of the independent variables Age of the subject if male subject, 0 if female subject The term is called a higher-order term, since it is the value of a quantitative variable () squared (i.e., raised to the seco