Sec 10.3 Coefficient of Determination and Standard Error of the Estimate.

Review concepts x y fill in the third row of the table for each x value.

Review concepts x y

Variation Bluman, Chapter 10 5 Regression line

Variations The total variation is calculated by: This the sum of the squares of the vertical distances from the mean.

2 parts of variation The total variation is made up off two types of variation: 1. Explained variation: attributed to the relationship between x & y. 2. Unexplained variation: due to chance.

Explained variation Most of the variation can be explained by the relationship.

Unexplained variation When this variation is small then the value of r will be close to 1 or -1.

The last few slides summarized: Explained variation Unexplained variation Total variation

Residuals The values of (y-y') are called residuals. A residual is the difference between the actual value of y and the predicted value of y' for a given x value. The mean of the residuals is always zero.

Coefficient of Determination, r 2 2. non-determination, 1-r 2

Coefficient of determination, r 2 The coefficient of determination,r 2, is a measure of the variation of the dependent variable that is explained by the regression line and the independent variable.

Coefficient of Determiation coefficient of determination The coefficient of determination is the ratio of the explained variation to the total variation. The symbol for the coefficient of determination is r 2. Another way to arrive at the value for r 2 is to square the correlation coefficient. Bluman, Chapter 10 14

Coefficient of Nondetermination: Coefficient nondetermination is the measure of the rest of the variation that is not explained by r 2. It is the complement of r 2 and equals to 1-r 2.

Coefficient of Nondetermiation coefficient of nondetermination The coefficient of nondetermination is a measure of the unexplained variation. The formula for the coefficient of determination is 1.00 – r 2. Bluman, Chapter 10 16

Some facts: The coefficient of determination is a percent. i.e. if r 2 =.81 that means 81% of variation in the dependent variable is explained by the variation in the independent variable. The coefficient of nondetermination is: 1-81%=19% and it means that 19% …

Example: Let r= Find the coefficients of determination and nondetermination. Explain the meaning of each.

Standard Error of the estimate Symbol: S est S est is the standard deviation of the observed y values about the predicted y' values.

Standard Error of the Estimate standard error of estimate The standard error of estimate, denoted by s est is the standard deviation of the observed y values about the predicted y' values. The formula for the standard error of estimate is: Bluman, Chapter 10 20

Chapter 10 Correlation and Regression Section 10-3 Example Page #569 Bluman, Chapter 10 21

A researcher collects the following data and determines that there is a significant relationship between the age of a copy machine and its monthly maintenance cost. The regression equation is y = x. Find the standard error of the estimate. Example 10-12: Copy Machine Costs Bluman, Chapter 10 22

Example 10-12: Copy Machine Costs Bluman, Chapter Machine Age x (years) Monthly cost, yyy–y(y–y ) 2 A B C D E F

Chapter 10 Correlation and Regression Section 10-3 Example Page #570 Bluman, Chapter 10 24

Example 10-13: Copy Machine Costs Bluman, Chapter 10 25

Example 10-13: Copy Machine Costs Bluman, Chapter Machine Age x (years) Monthly cost, yxyy2y2 A B C D E F ,844 6,084 4,900 8,100 8,649 10,609 42,186

Formula for the Prediction Interval about a Value y Bluman, Chapter 10 27

Chapter 10 Correlation and Regression Section 10-3 Example Page #571 Bluman, Chapter 10 28

For the data in Example 10–12, find the 95% prediction interval for the monthly maintenance cost of a machine that is 3 years old. Step 1: Find Step 2: Find y for x = 3. Step 3: Find s est. (as shown in Example 10-13) Example 10-14: Copy Machine Costs Bluman, Chapter 10 29

Step 4: Substitute in the formula and solve. Example 10-14: Copy Machine Costs Bluman, Chapter 10 30

Step 4: Substitute in the formula and solve. Example 10-14: Copy Machine Costs Bluman, Chapter Hence, you can be 95% confident that the interval < y < contains the actual value of y.

Read section 10.3 Take notes on Residuals. Review the calculator steps. Page 574 #1-7 all, 9-17 odds Bluman, Chapter 1032