1. Developing and Using a Simple Regression Equation. The simple regression model is based on the equation for a straight line: Yc = A+BX

2. Yc = A+BX where: Yc = the calculated or estimated value for the dependent variable A= the Y intercept B= the slope of the line X = independent variable

3. Graphical depiction of a regression line Y X 0 Yc = A + BX intercept slope

4. How can we estimate next year’s yield?

5. Take the average?

7. What might trend represent?

8. What might trend represent? Technology – innovation – hybrid development

9. We want to find the line of best fit. An average just won’t cut it.

10. Graphical depiction of a regression line Y X 0 * * * * * *

11. Step 1: Collect the historical data. Every Y observation must have an X.

12. Step 2: Put the data in a tabular form. X Y

13. Step 3: Calculate the Means of X and Y

14. X =  X ----- n Y =  Y ----- n

15. Step 4. Compute the slope (B) and Y intercept (A) B =  XY – n X Y ------------------  X 2 – n X 2

16. A = Y - BX

18. B = 1823124 – (7*1997*130.414) ______________________ 27916091 – (7*1997*1997) B = (67/28) = 2.3929

19. A = 130.414 – (2.3929 * 1997) A = 130.414 – 4778.62 A = - 4648.20

20. Y 2001 Y 2001 = -4648.20 +(2.3929*2001) Y 2001 = 139.99