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Revision: Linear Regression Maths HSC Commerce (English Medium) 12th Standard Board Exam Maharashtra State Board

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Definitions [3]

Define Regression.

The term ‘Regression’ was first coined and used in 1877 by Francis Galton while studying the relationship between the height of fathers and sons. The average height of children born of parents of a given height tended to move or “regress” toward the average height in the population as a whole. Gabon’s law of universal regression was confirmed by his friend Karl Pearson, who collected more than a thousand records of heights of members of family groups. The literal meaning of the word “regression” is “Stepping back towards the average”.

Definition: Regression

A statistical method used to predict the value of one variable based on another

Dependent Variable (Y)

Variable being predicted.

Independent Variable (X)

Variable used for prediction.

Regression Equations

A mathematical equation used for prediction.

Definition: Fitting Simple Linear Regression

Fitting Regression:

Finding the straight line that best represents the relationship between X and Y using the given sample data.

Scatter Diagram:

A graphical representation of paired data (X, Y).

Each pair is plotted as a point.

Formulae [3]

Formula: Method of Least Squares

Best-fit line is the one that minimises the sum of squares of residuals:

\[S^2=\sum(y_i-\hat{y}_i)^2\]

Residual: \[e_i=y_i-\hat{y}_i\]

Formula: Line of Regression of Y on X

Y = a + bX

where b = bYX = regression coefficient of  Y on X

\[b_{_{YX}}=\frac{\operatorname{cov}(X,Y)}{\operatorname{var}(X)}\]

\[=\frac{\frac{\sum\left(x_i-\overline{x}\right)\left(y_i-\overline{y}\right)}{n}}{\frac{\sum\left(x_i-\overline{x}\right)^2}{n}}\]

\[=\frac{\sum x_iy_i-n\bar{x}\bar{y}}{\sum x_i^2-n\bar{x}^2}\]

\[a=\overset{-}{\operatorname*{y}}-b\overset{-}{\operatorname*{x}}\]

Formula: Line of Regression of X on Y

\[X=a^{\prime}+b^{\prime}y\]

where b' = bXY = regression coefficient of X on Y

\[b_{_{XY}}\quad=\quad\frac{\operatorname{cov}(X,Y)}{\operatorname{var}(Y)}\]

\[\begin{array}
{cc} & \frac{\sum\left(x_i-\overline{x}\right)\left(y_i-\overline{y}\right)}{n} \\
= & \frac{\sum\left(y_i-\overline{y}\right)^2}{n}
\end{array}\]

\[b_{XY}=\frac{\sum x_iy_i-n\bar{x}\bar{y}}{\sum y_i^2-n\bar{y}^2}\]

\[\begin{array}
{rcl}a^{\prime} =\overline{x}-b^{\prime}\overline{y}
\end{array}\]

Key Points

Key Points: Types of Regression

Simple Linear Regression:

One independent variable.Multiple Linear Regression

Multiple Linear Regression:

Two or more independent variables

Key Points: Properties of Regression Coefficients

1.\[b_{_{XY}}.b_{_{YX}}=r^{2}\]

2. If  bYX > 1, then bXY < 1.

3. \[\left|\frac{b_{yx}+b_{xy}}{2}\right|\geq|r|\]

4. Regression coefficients are independent of a change of origin but are affected by a change of scale.

Important Questions [26]

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