The rental of an apartment (?R) near campus is a function of the square footage (??Sq). A random sample of apartments near campus yielded the following summary statistics: ?¯R¯ = $340, ??¯Sq¯ = 93, ??sR = $ 29.1, and ???sSq= 10.5. Suppose also that the correlation between price and weight is ?r = 0.83. (a) Write the implied least squares linear regression equation. (b) Suppose an apartment has 75 sqft. Predict its price based on the above model. (c) Suppose the true rental of the apartment in part (b) is $ 345. What is the value of the residual?
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
The rental of an apartment (?R) near campus is a
?¯R¯ = $340, ??¯Sq¯ = 93, ??sR = $ 29.1, and ???sSq= 10.5. Suppose also that the
(a) Write the implied least squares linear regression equation.
(b) Suppose an apartment has 75 sqft. Predict its price based on the above model.
(c) Suppose the true rental of the apartment in part (b) is $ 345. What is the value of the residual?
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