How Do You Do A Regression Analysis?
• Develop a model based on theory. Decide what variable you are interested in, and determine independent variables you think are linearly related. • Gather the data. Ideally, you should conduct a controlled experiment, but often you must settle for observational data. • Draw a diagram, if possible, to quickly see potential relationships. This will not be possible if you have several variables. • Determine the regression equation. This is usually done using computer software, particularly when multiple variables are involved. • Check if all required conditions are met. If not, attempt to correct them. The required conditions are: • Probability distribution of error variable ε is normal. • Mean of error variable is 0. • Standard deviation of error variable is a constant (σε). • The errors are independent. • Check for outliers and influential observations. These can affect the entire regression model and should be investigated to determine if they should be included or excluded from the m
