Consider the following model you wish to estimate by using the OLS, Price = α + β sqrft + ε, where price is the house price in thousands of dollars and sqrft is size of house in square feet. The OLS result from Excel is as follows (see below). Suppose the house in the sample has sqrft=3,500. Find the predicted selling price for this house from the OLS regression estimation.
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.
Consider the following model you wish to estimate by using
the OLS,
Price = α + β sqrft + ε,
where price is the house price in thousands of dollars and sqrft is size of house in square feet. The OLS result from Excel is as follows (see below).
Suppose the house in the sample has sqrft=3,500. Find the predicted selling price for this house from the OLS regression estimation.
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