Guide to Using Excel 2007 For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 8th Ed. Chapter 14: Introduction to Linear Regression and Correlation Analysis By Groebner, Shannon, Fry, & Smith Prentice-Hall Publishing Company Copyright, 2011

Chapter 14 Excel Examples Correlation Coefficient Correlation Coefficient Correlation Coefficient Correlation Coefficient Midwest Distribution Simple Linear Regression & Correlation Simple Linear Regression & Correlation Fitzpatrick & Associates Simple Linear Regression Simple Linear Regression Simple Linear Regression Simple Linear Regression Vantage Electronics Regression Analysis for Description Regression Analysis for Description Regression Analysis for Description Regression Analysis for Description Car Mileage

Chapter 14 Excel Examples Regression Analysis for Prediction Regression Analysis for Prediction Regression Analysis for Prediction Regression Analysis for Prediction Freedom Hospital

Correlation Coefficient - Midwest Distribution Issue: The company wants to analyze the relationship between salary and years with the company. Objective: Use Excel 2007 to help test whether a significant linear relationship exists between salary and years with the company. Data file is Midwest.xls

Correlation Coefficient – Midwest Distribution. Open the file Midwest.xls To construct the scatter diagram see the Personal Computers tutorial in Chapter 2.

Correlation Coefficient – Midwest Distribution. Select the Data tab Select Data Analysis Select Correlation OK

Correlation Coeffricient – Midwest Distribution. Input Range = A1:B13 Grouped by Columns Labels in First Row New Worksheet Ply: Correlation

Correlation Coefficient – Midwest Distribution. The correlation between Sales and Years with Midwest is

Simple Linear Regression - Fitzpatrick & Associates Issue: The Fitzpatrick analysts want to model the relationship between profits and number of employees. Objective: Use Excel 2007 to test whether the apparent linear relationship is statistically significant. Data file is Fortune 50.xls

Simple Linear Regression – Fitzpatrick & Associates Open the file Fortune 50.xls

Simple Linear Regression – Fitzpatrick & Associates Because you want the Employees to plot on the horizontal axis, it needs to be to the left of Profit. To accomplish this, copy Column D to Column K. Select the Insert Tab Select Scatter chart Select the Scatter with only Markers

Simple Linear Regression – Fitzpatrick & Associates Add titles Delete Legend Move chart to new sheet titled Scatter plot

Simple Linear Regression – Fitzpatrick & Associates To find Regression: Return to the Data Sheet Select the Data tab Select Regression OK

Simple Linear Regression – Fitzpatrick & Associates Y Range = K3:K53 X Range = J3:J53 New Worksheet Ply OK

Simple Linear Regression – Fitzpatrick & Associates Output Shows the Correlation Coefficient, R square and Regression Coefficients

Simple Linear Regression - Vantage Electronics Issue: Analysts want to compare the effectiveness of the Vantage Sensor - Vanguard against its competitor, Scorpion. Objective: Use Excel 2007 to test whether the apparent linear relationship is statistically significant. Data file is Vantage.xls

Simple Linear Regression - Vantage Electronics Using the procedures from this chapter Create a Scatter Plot Note: Copy the Scorpion data to the column to the right of the Vantage data. Add titles, delete legend, and move to a new sheet.

Simple Linear Regression - Vantage Electronics The resulting model will give you the regression coefficient, the slope and the t- test statistic

Regression Analysis for Description- Car Mileage Issue: Analysts want to determine the relationship between EPA highway mileage and automobile horsepower. Objective: Use Excel 2007 to test whether the apparent linear relationship is statistically significant. Data file is Automobiles.xls

Regression Analysis for Description – Car Mileage Open the file Automobiles.xls Select the Data tab Select Data Analysis Select Regression OK

Regression Analysis for Description – Car Mileage Input Y Range: B1:B31 Input X Range: F1:F31 Select Labels New Worksheet Ply: Auto OK

Regression Analysis for Description – Car Mileage The output shows the coefficient of determination the coefficients for the regression equation.

Regression Analysis for Prediction - Freedom Hospital Issue: The administrator has been requested by the hospital’s board of directors to develop a model that can be used to predict the total charges for a geriatric patient. Objective: Use Excel 2007 to develop a statistically significant prediction model. Data file is Patients.xls

Regression Analysis for Prediction – Freedom Hospital Open the file Patients.xls Select the Data tab Select Data Analysis Select Regression OK

Regression Analysis for Prediction – Freedom Hospital Input Y Range: G1:G139 Input X Range: B1: B139 Select Labels New Worksheet Ply: Patients OK

Regression Analysis for Prediction – Freedom Hospital The Excel output shows the coefficient of determination and the coefficients of the linear regression model.

Regression Analysis for Prediction – Freedom Hospital To determine the prediction interval Return to data sheet Click on the Add-In tab Click on PHStat, Regression Simple Linear Regression.

Regression Analysis for Prediction – Freedom Hospital Y Variable Cell Range G1:G139 X Variable Cell range: B1:B139 Select First Cells… Select Regression Statistics … Select Confidence … = 5 Confidence Interval … 95

Regression Analysis for Prediction – Freedom Hospital The output shows the 95% confidence interval for both the Average Value of Y and for an Individual Value of Y