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Generating the Least Squares Regression Line. Objective: To develop an understanding of the procedures used to generate a LSRL. Residuals. Residual = observed value – predicted value. residual = y – ŷ the distance of the point from the line
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Generating the Least Squares Regression Line Objective: To develop an understanding of the procedures used to generate a LSRL.
Residuals Residual = observed value – predicted value residual = y– ŷ the distance of the point from the line A least squares line is one that minimizes the sum of squared residuals
Residuals continued… Some residuals will be an overestimate and others will be an underestimate Observed value Predicted value A residual is similar to the formula for deviation from chapter one. Knowing this, what do you think happens when you take the sum of all residuals?
Determining LSRL • To determine the LSRL we will evaluate the vertical residuals. Here is the process: • Since some of the residuals will be positive and others will be negative, we will square them all. • Next we will add all the squared residuals (Σ) • This will be tested on all possible lines through the scatterplot and the line will the smallest sum of squared residuals will be used.
Visualizing LSRL Least Squares Applet
(3,10) y =.5(6) + 4 = 7 2 – 7 = -5 4.5 y =.5(0) + 4 = 4 0 – 4 = -4 -5 y =.5(3) + 4 = 5.5 10 – 5.5 = 4.5 -4 (6,2) (0,0) (0,0) Sum of the squares = 61.25
(3,10) 6 Find y - y -3 (6,2) -3 (0,0) What is the sum of the deviations from the line? Will it always be zero? Use a calculator to find the line of best fit The line that minimizes the sum of the squares of the deviations from the line is the LSRL. Sum of the squares = 54
The correlation coefficient and the LSRL are both non-resistantmeasures.