Linear regression and correlation

Student learning outcomes

By the end of this chapter, the student should be able to:

• Discuss basic ideas of linear regression and correlation.
• Create and interpret a line of best fit.
• Calculate and interpret the correlation coefficient.
• Calculate and interpret outliers.

Introduction

Professionals often want to know how two or more numeric variables are related. For example, is there a relationship between the grade on the second math exam a student takes and thegrade on the final exam? If there is a relationship, what is it and how strong is the relationship?

In another example, your income may be determined by your education, your profession, your years of experience, and your ability. The amount you pay a repair person for labor isoften determined by an initial amount plus an hourly fee. These are all examples in which regression can be used.

The type of data described in the examples is bivariate data - "bi" for two variables. In reality, statisticians use multivariate data, meaning many variables.

In this chapter, you will be studying the simplest form of regression, "linear regression" with one independent variable ( $x$ ). This involves data that fits a line in two dimensions. You will also study correlation which measures how strong the relationship is.