A random sample of eight drivers selected from a small town insured with a company and having similar minimum required auto insurance policies was selected. The following table lists their driving experiences in years and monthly auto insurance premiums in dollars. Driving Experience: 5 2 12 9 15 6 25 16 Monthly Premium in $: 64 87 50 71 44 56 42 60 We are creating a regression model (line) to predict premium amount using driving experience. A. Identify the Dependent and Independent variables. B. Using Excel, create a regression output page. Attach the output page. C. Complete the regression line.
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
A random sample of eight drivers selected from a small town insured with a company and having similar minimum required auto insurance policies was selected. The following table lists their driving experiences in years and monthly auto insurance premiums in dollars.
Driving Experience: 5 2 12 9 15 6 25 16
Monthly Premium in $: 64 87 50 71 44 56 42 60
We are creating a regression model (line) to predict premium amount using driving experience.
A. Identify the Dependent and Independent variables.
B. Using Excel, create a regression output page. Attach the output page.
C. Complete the regression line.
D. Evaluate and explain the strength of the relationship.
E. How good is the model according to the Coefficient of Determination?
F. Predict the premium when the driving experience is 8 years.
G. Predict the premium when the driving experience is 18 years.
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