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2-2 LINEAR REGRESSION

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2-2 LINEAR REGRESSION. OBJECTIVES. Be able to fit a regression line to a scatterplot. Find and interpret correlation coefficients. Make predictions based on lines of best fit. line of best fit linear regression line least squares line domain range interpolation. extrapolation - PowerPoint PPT Presentation
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Financial Algebra © Cengage/South-Western Slide 1 2-2 LINEAR REGRESSION Be able to fit a regression line to a scatterplot. Find and interpret correlation coefficients. Make predictions based on lines of best fit. OBJECTIVES
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Page 1: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage/South-Western Slide 1

2-2LINEAR REGRESSION

Be able to fit a regression line to a scatterplot.

Find and interpret correlation coefficients.Make predictions based on lines of best fit.

OBJECTIVES

Page 2: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 2

line of best fit linear regression line least squares line domain range interpolation

extrapolation correlation coefficient strong correlation weak correlation moderate correlation

Key Terms

Page 3: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 3

How can the past predict the future?

The trends shown by scatterplots can be used to predict the future. But making a prediction without a line of best fit to guide you would be arbitrary.

What can you tell about the sign of the correlation coefficient and the slope of the regression line?

Page 4: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 4

How can the past predict the future?

The domain is the set of 1st elements of an ordered pair.

The range is the set of the 2nd elements.If you use a number within the domain to predict

the y-value, that is called interpolation.If you use a number outside the domain to

predict the y-value, that is called extrapolation.

Page 5: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 5

Example 1 Find the equation of the linear regression line for

Rachael’s scatterplot in Example 1 from Lesson 2-1. Round the slope and y-intercept to the nearest hundredth. The points are given below.

(65, 102), (71, 133), (79, 144), (80, 161), (86, 191),(86, 207), (91, 235), (95, 237), (100, 243)

Page 6: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 6

How can the past predict the future?

The line of best fit is also called the linear regression line.

The line can be represented by an equation in the form of y = mx + b, where m is the slope and b is the y-intercept.

Page 7: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 7

Example 1 (cont.)

The linear regression equation is y = 4.44x - 187.67

60 65 70 75 80 85 90 95 100 10580

100120140160180200220240260

f(x) = 4.43824701195219 x − 187.666666666667

Number of Water Bottles Sold

Temperature (°F)

Page 8: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 8

Find the equation of the linear regression line of the scatterplot defined by these points: (1, 56), (2, 45), (4, 20), (3, 30), and (5, 9). Round the slope and y-intercept to the nearest hundredth.

CHECK YOUR UNDERSTANDING

Page 9: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 9

Example 2 Interpret the slope as a rate for Rachael’s linear

regression line. Use the equation y = 4.44x - 187.67

What is the slope?4.44

Slope is

Since y shows water bottle sales and x shows the temperature, the slope is a rate of bottles per degree.

Page 10: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 10

Example 2 (cont.)y = 4.44x - 187.67

The slope of 4.44 shows how many bottles she will sell for each degree the temperature rises.

Since she can’t sell a fraction of a bottle, she will sell approximately 4 bottles per degree.

Page 11: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 11

Using the equation y = 4.44x - 187.67,approximately how many more water bottles will Rachael sell if the temperature increases 2 degrees?

CHECK YOUR UNDERSTANDING

Page 12: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 12

EXAMPLE 3 Rachael is stocking her concession stand for a day in

which the temperature is expected to reach 106 degrees Fahrenheit. How many water bottles should she pack?

Substitute 106 for x in y = 4.44x - 187.67y = 4.44(106) - 187.67y = 282.97

Rachel should expect to sell about 283 bottles.This is extrapolation since 106 is not between 65 and

100, the low and high x-values.

Page 13: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 13

How many water bottles should Rachael pack if the temperature forecasted were 83 degrees? Is this an example of interpolation or extrapolation? Round to the nearest integer.

CHECK YOUR UNDERSTANDING

Page 14: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 14

How well the line is predicting the trend?

If most of the points are close to the line, it is a good predictor of the trend.

The correlation coefficient, r, is a number that is between -1 and 1, inclusive.

Page 15: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 15

How well the line is predicting the trend?

If the absolute value is greater than 0.75, there is a strong correlation.

If the absolute value is less than 0.3, there is a weak correlation.

Any other absolute value is a moderate correlation.

Page 16: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 16

How does the equation show the type of correlation?

Positive correlation coefficients show a positive correlation.

Negative correlation coefficients show a negative correlation.

Page 17: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 17

EXAMPLE 4 Find the correlation coefficient to the nearest hundredth

for the linear regression for Rachael’s data. Interpret the correlation coefficient.

If you use Excel, use Trendlines to find r2 = 0.9453. Round the square root to the nearest hundredth:

r = 0.97Since it is positive and greater than 0.75, there is a

strong positive correlation between the high temperature and the number of bottles sold.

Page 18: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 18

Find the correlation coefficient to the thousandth for the linear regression for the data in Check Your Understanding for Example 1. Interpret the correlation coefficient.

CHECK YOUR UNDERSTANDING

Page 19: 2-2 LINEAR REGRESSION

Financial Algebra© Cengage Learning/South-Western Slide 19

Carlos entered data into his calculator and found a correlation coefficient of -0.28. Interpret this correlation coefficient.

EXTEND YOUR UNDERSTANDING


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