Download presentation

1
**Coefficient of Determination- R²**

Statistical Inference for Managers By Imran Khan

2
The total variability in a regression SST, can be partitioned into a component explained by the regression SSR and a component due to unexplained error SSE. SST=SSR+SSE Total sum of squares SST= Error sum of squares SSE= Regression sum of squares SSR= Graph

3
**Coefficient of Determination**

R² measures the proportion of variation in the dependent variable Y explained by the regression model. R²= SSR/ SST= 1-SSE/SST SSR= R² increases directly with the spread of independent variable. 0<R²<1 Greater the R², better fitted is the model

4
**σ²= S²e=Σei²/n-2=SSE/n-2**

Correlation and R² R² for simple regression is equal to correlation squared. R²= r² Estimation of model Error Variance σ²= S²e=Σei²/n-2=SSE/n-2

5
Example Find and interpret the coefficient of determination for the regression of stereo system sales on price, using the following data: Sales Price

Similar presentations

OK

1 1 Slide © 2008 Thomson South-Western. All Rights Reserved Slides by JOHN LOUCKS St. Edward’s University.

1 1 Slide © 2008 Thomson South-Western. All Rights Reserved Slides by JOHN LOUCKS St. Edward’s University.

© 2017 SlidePlayer.com Inc.

All rights reserved.

Ads by Google

Ppt on determinants of economic development Ppt on lifelines of national economy for class 10 Maths ppt on rational numbers Ppt on biography of bill gates Ppt on zener diode polarity Immune system for kids ppt on batteries Ppt on reverse mortgage in india Ppt on different occupations of filipinos Ppt on index numbers line Full ppt on electron beam machining process