Consider a Qunat vars X and Y and suppose we have collected data on both of them from an underlying population: X1, X2,...,xn У1.У...... Уп PowerPoint Slide Show-LinearReg.pptx-PowerPoint Bivariate Analysis: Modelling a Linear Relation XY After checking their scatter graph and correlation, if the amount of linear relation between the two was high enough, we can model the relation using a linear function: Y=f(X)=a+bX To that end, we need to estimate a and b. b= nΣ(xy) - ExΣy nEx - (Σ»)? a= Σy-bΣx n Ex: Linear of Model of Whr and Salary. Oba Whrs X 1 6 2 8 9 9 10 9 8 7 6 3 4 5 6 8 9 10 7 Salary Y 8 20 30 35 50 38 25 23 15 26 48 160 970 315 500 342 200 161 90 182 X^2 36 64 81 81 100 81 64 49 36 49 MULTIPLE CHOICE QUESTION The Cor(X,Y)=0.9, hence b in Y=a+bX is negative negative positive Rewatch Submit

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**Bivariate Analysis: Modelling a Linear Relation**

Consider a Quantitative Variables X and Y and suppose we have collected data on both of them from an underlying population:

\( x_1, x_2, ..., x_n \)  
\( y_1, y_2, ..., y_n \)

After checking their scatter graph and correlation, if the amount of linear relation between the two was high enough, we can model the relation using a linear function: \( Y=f(X)=a+bX \)

To that end, we need to estimate \( a \) and \( b \).

\[ b = \frac{n\sum(xy) - \sum x \sum y}{n\sum x^2 - (\sum x)^2} \]

\[ a = \frac{\sum y - b\sum x}{n} \]

**Example: Linear Model of Whr and Salary.**

| Obs | X (Whr) | Y (Salary) | XY  | X\(^2\) |
|-----|---------|------------|-----|---------|
| 1   | 6       | 8          | 48  | 36      |
| 2   | 9       | 20         | 160 | 64      |
| 3   | 9       | 30         | 270 | 81      |
| 4   | 9       | 35         | 315 | 81      |
| 5   | 10      | 50         | 500 | 100     |
| 6   | 7       | 50         | 342 | 49      |
| 7   | 9       | 8          | 72  | 81      |
| 8   | 7       | 23         | 161 | 49      |
| 9   | 6       | 7          | 42  | 36      |
| 10  | 7       | 26         | 182 | 49      |

**Multiple Choice Question**

The Cor(X,Y)=0.9, hence b in Y=a+bX is:

- [ ] negative
- [ ] positive

**Explanation of Graph**

The table presents the observed data points with variables X (Whr) and Y (Salary), along with the calculated products \( XY \) and squares \( X^2 \) for each
Transcribed Image Text:**Bivariate Analysis: Modelling a Linear Relation** Consider a Quantitative Variables X and Y and suppose we have collected data on both of them from an underlying population: \( x_1, x_2, ..., x_n \) \( y_1, y_2, ..., y_n \) After checking their scatter graph and correlation, if the amount of linear relation between the two was high enough, we can model the relation using a linear function: \( Y=f(X)=a+bX \) To that end, we need to estimate \( a \) and \( b \). \[ b = \frac{n\sum(xy) - \sum x \sum y}{n\sum x^2 - (\sum x)^2} \] \[ a = \frac{\sum y - b\sum x}{n} \] **Example: Linear Model of Whr and Salary.** | Obs | X (Whr) | Y (Salary) | XY | X\(^2\) | |-----|---------|------------|-----|---------| | 1 | 6 | 8 | 48 | 36 | | 2 | 9 | 20 | 160 | 64 | | 3 | 9 | 30 | 270 | 81 | | 4 | 9 | 35 | 315 | 81 | | 5 | 10 | 50 | 500 | 100 | | 6 | 7 | 50 | 342 | 49 | | 7 | 9 | 8 | 72 | 81 | | 8 | 7 | 23 | 161 | 49 | | 9 | 6 | 7 | 42 | 36 | | 10 | 7 | 26 | 182 | 49 | **Multiple Choice Question** The Cor(X,Y)=0.9, hence b in Y=a+bX is: - [ ] negative - [ ] positive **Explanation of Graph** The table presents the observed data points with variables X (Whr) and Y (Salary), along with the calculated products \( XY \) and squares \( X^2 \) for each
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