Predictive Analytics : QM901.

1x
Prof U Dinesh Kumar, IIMB

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 Predictive Analytics : QM901.1x

Types of Regression Prof U Dinesh Kumar, IIMB

Regression
One independent
Models
More than one
variable
independent variable

Simple Multiple
Regression Regression

Linear Non-linear Linear Non-linear

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 Predictive Analytics : QM901.1x

Types of Regression
Prof U Dinesh Kumar, IIMB

• Simple linear regression

Y   0  1 X 1  

• Multiple linear regression

Y   0  1 X 1   2 X 2  ...   k X k  
• Nonlinear regression
1
Y  0   X 2 3  
1   2 X 1
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 Predictive Analytics : QM901.1x

Multiple Linear Regression

Prof U Dinesh Kumar, IIMB

Multiple linear regression means linear in regression parameters (beta

values).
Y   0  1x1   2 x2  ...   k xk  
Y   0  1x1   2 x2  3 x1x2   4 x2 ...   k xk  
2

An important task in multiple regression is to

estimate the beta values (1, 2, 3 etc…)
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 Predictive Analytics : QM901.1x
Prof U Dinesh Kumar, IIMB

Regression Model Development

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 Predictive Analytics : QM901.1x

Regression Model Development Prof U Dinesh Kumar, IIMB

Derive and Analyze Descriptive

Explore the Data Pre-process the Data
Statistics

Perform Diagnostic Tests Estimate Regression Define Functional Form of the

Parameters Relationship

NO

Model Satisfies
Diagnostic Test
YES STOP

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