Lesson 4: Residual Analysis and R-Squared

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January 26, 2017 at 10:00 am  •  Posted in s17-busad360 by  •  0 Comments

Thu, Jan 26

Review:

  • Linear Regression
  • Exam 1 
    • Part 1 Take-Home (instructions provided in class on Tue Jan 31)
    • Part 2 In-Class (on Thu Feb 2)

Presentation:

  • Residual Analysis
    • Individual Residuals (y – y-hat)
    • Residual Sum of Squares (SSE) = ∑(y – y-hat)²
    • Coefficient of Determination
      • R-Squared = 1 – SSE/SSyy
      • Relationship to Pearson Correlation Coefficient
      • Interpretation
  • Example
    • Beer party data: {(60,10), (70,12), (80,20), (90,40)}
    • Calculate individual residuals
    • Calculate SSE
    • Calculate R-Squared

Activity:

  • Calculate Individual Residuals, SSE and R-Squared
    • Use data and calculations from previous class
      • Data set 1: {(3,5), (5,8), (8,11), (12,10)}
      • Data set 2: {(50,12), (60,15), (70,20), (80,30)}
      • Data set 3: {(2,12), (4,9), (7,6), (11,3)}

 

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