A simple linear regression that describes the effect of individuals’ cigarette smoking on health is given by Health = α + β * cigarettes + u, where Health is a measure of health that is on the scale of 1 to 5, where 1 means excellent health and 5 means poor health. So the bigger the number, the worse the health. cigarettes is the average number of cigarettes smoked per day; the unobservable u is an individual’s health consciousness. Note that health conscious person tends to live a healthy life in general. What will happen to β if cigarettes is in terms of weekly rather than daily?
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.
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