Download Regression Analysis

Guide to Using Excel For Basic
Statistical Applications
To Accompany
Business Statistics: A Decision Making
Approach, 7th Ed.
Chapter 14:
Introduction to Linear Regression and
Correlation Analysis
By
Groebner, Shannon, Fry, & Smith
Prentice-Hall Publishing Company
Copyright, 2008
Chapter 14
Excel Examples




Correlation Coefficient
Midwest Distribution
Regression Analysis
Fitzpatrick and Associates
Regression Analysis
Vantage Electronics
Regression Analysis for Description
Car Mileage
Chapter 14
Excel Examples


Regression Analysis for Prediction
Freedom Hospital
Residual Analysis
Freedom Hospital
Correlation Analysis Midwest Distribution
Issue: The company wants to analyze the
relationship between salary and years with the
company.
Objective: Use Excel to help test whether a
significant linear relationship exists between
salary and years with the company.
Data file is Midwest.xls
Correlation Analysis – Midwest Distribution.
Open the file Midwest.xls
To construct the scatter diagram
see the Personal Computers
tutorial in Chapter 2.
Correlation Analysis – Midwest Distribution.
•Select the Data tab
•Select Data Analysis
•Select Correlation
•OK
Correlation Analysis – Midwest Distribution.
•Input Range = A1:B13
•Grouped by Columns
•Labels in First Row
•New Worksheet Ply: Correlation
Correlation Analysis – Midwest Distribution.
The correlation between
Sales and Years with
Midwest is 0.8325
Regression Analysis Midwest Distribution
Issue: The marketing manager wants to determine
the relationship between sales and years with the
company.
Objective: Use Excel to test whether the apparent
linear relationship is statistically significant.
Data file is Midwest.xls
Regression Analysis – Midwest Distribution.
Open the file Midwest.xls
Regression Analysis – Midwest Distribution.
•Select the Data tab
•Select Data Analysis
•Select Regression
•OK
Regression Analysis – Midwest Distribution.
nput Y Range = A1:A13
nput X Range = B1:B13
elect Labels
ew Worksheet Ply: Correlation
K
Regression Analysis – Midwest Distribution.
The output shows:
• the correlation coefficient
• the coefficients for the regression equation.
• for each additional year, the average increase
in company sales is 49.91008 = $4,991
Regression Analysis Fitzpatrick & Associates
Issue: The Fitzpatrick analysts want to model the
relationship between profits and number of
employees.
Objective: Use Excel to test whether the apparent
linear relationship is statistically significant.
Data file is Fortune 50.xls
Regression Analysis – Fitzpatrick & Associates
Open the file Fortune50.xls
Regression Analysis – Fitzpatrick & Associates
•
•
•
•
Because you want the
Employees to plot on the
horizontal axis, it needs to be to
the left of Profit. To accomplish
this, copy Column D to Column
K.
Select the Insert Tab
Select Scatter chart
Select the Scatter with only
Markers
Regression Analysis – Fitzpatrick & Associates
•
•
•
Add titles
Delete Legend
Move chart to
new sheet titled
Scatter plot
Regression Analysis – Fitzpatrick & Associates
To find Regression:
•Return to the Data
Sheet
•Select the Data tab
•Select Regression
•OK
Regression Analysis – Fitzpatrick & Associates
•Y Range = K3:K53
•X Range = J3:J53
•New Worksheet Ply
•OK
Regression Analysis – Fitzpatrick & Associates
Output Shows
R square and
Coefficients
Regression Analysis for
Vantage Electronics
Issue: Analysts want to compare the effectiveness
of the Vantage Sensor - Vanguard against its
competitor, Scorpion.
Objective: Use Excel to test whether the apparent
linear relationship is statistically significant.
Data file is Vanguard.xls
Regression Analysis for Vantage Electronics
Using the
procedures from
this chapter
Create a Scatter
Plot
Note: Copy the
Scorpion data to
the column to the
right of the
Vantage data.
Add titles, delete
legend, and move
to a new sheet.
Regression Analysis for Vantage Electronics
The resulting model
will give you the
regression coefficient
and the slope
Regression Analysis for
Description- Car Mileage
Issue: Analysts want to determine the relationship
between EPA highway mileage and automobile
horsepower.
Objective: Use Excel to test whether the apparent
linear relationship is statistically significant.
Data file is Automobiles.xls
Regression Analysis – Car Mileage
•Open the file Automobiles.xls
•Select the Data tab
•Select Data Analysis
•Select Regression
•OK
Regression Analysis – Car Mileage
•Input Y Range: B1:B31
•Input X Range: F1:F31
•Select Labels
•New Worksheet Ply: Auto
•OK
Regression Analysis – Car Mileage
The output shows
•the coefficient of
determination
•the coefficients for the
regression equation.
Regression Analysis for
Prediction - Freedom Hospital
Issue: The administrator has been requested by the
hospital’s board of directors to develop a model that
can be used to predict the total charges for a geriatric
patient.
Objective: Use Excel to develop a statistically
significant prediction model.
Data file is Patients.xls
Regression Analysis for Prediction – Freedom Hospital
•Open the file Patients.xls
•Select the Data tab
•Select Data Analysis
•Select Regression
•OK
Regression Analysis for Prediction – Freedom Hospital
•Input Y Range: G1:G139
•Input X Range: B1: B139
•Select Labels
•New Worksheet Ply:
Patients
•OK
Regression Analysis for Prediction – Freedom Hospital
The Excel output
shows the coefficient
of determination and
the coefficients of
the linear regression
model.
Residual Analysis Freedom Hospital
Issue: The administrators want to determine whether
the prediction model developed is a valid use of
regression analysis or whether it violates some of the
necessary assumptions.
Objective: Use Excel to analyze the residuals from the
model.
Data file is Patients.xls
Residual Analysis – Freedom Hospital
In the Patients Data sheet:
•Select the Data tab
•Select Data Analysis
•Select Regression
Residual Analysis – Freedom Hospital
•Input Y Range: G1:G139
•Input X Range: B1:B139
•Select Labels
•Select Residuals
•Select Residual Plots
•OK
Residual Analysis – Freedom Hospital
At the bottom of
the regression
output (note the
row number) the
residual for each
observation is
given.
Residual Analysis – Freedom Hospital
The regression
output will also
plot the
residuals.