C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 1 1

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 2 Multiple Regression Analysis Model:

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 3

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 4

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 5 Multiple Regression Analysis Adjusted Coefficient of Determination

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 6 Multiple Regression Analysis Analysis of Variance and F Statistic

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 7 Problems in Regression Analysis Multicollinearity: Two or more explanatory variables are highly correlated. Heteroskedasticity: Variance of error term is not independent of the Y variable. Autocorrelation: Consecutive error terms are correlated.

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 8

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 9 Durbin-Watson Statistic Test for Autocorrelation If d = 2, autocorrelation is absent.

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 10 Steps in Demand Estimation Model Specification: Identify Variables Collect Data Specify Functional Form Estimate Function Test the Results

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 11 Functional Form Specifications Linear Function: Power Function:Estimation Format:

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 12

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 13

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 14

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 15 Chapter 4 Appendix

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 16

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 17

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 18

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 19 Getting Started Install the Analysis ToolPak add-in from the Excel installation media if it has not already been installed Attach the Analysis ToolPak add-in –From the menu, select Tools and then Add-Ins... –When the Add-Ins dialog appears, select Analysis ToolPak and then click OK.

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 20

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 21 Entering Data Data on each variable must be entered in a separate column Label the top of each column with a symbol or brief description to identify the variable Multiple regression analysis requires that all data on independent variables be in adjacent columns

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 22 Example Data

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 23 Running the Regression Select the Regression tool from the Analysis ToolPak dialog –From the menu, select Tools and then Data Analysis... –On the Data Analysis dialog, scroll down the list of Analysis Tools, select Regression, and then click OK –The Regression tool dialog will then be displayed

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 24

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 25

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 26 Select the Data Ranges Type in the data range for the Y variable or select the range on the worksheet Type in the data range for the X variable(s) or select the range on the worksheet If your ranges include the data labels (recommended) then check the labels option

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 27

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 28 Select an Output Option Output to a selected range –Selection is the upper left corner of the output range Output to a new worksheet –Optionally enter a name for the worksheet Output to a new workbook And then click OK

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 29

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 30 Regression Output

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 31 Multiple Regression Data

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 32

C opyright  2007 by Oxford University Press, Inc. PowerPoint Slides Prepared by Robert F. Brooker, Ph.D.Slide 33 Regression Output