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Least Squares Regression Line and MAD

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For the data below

Year Automobile Sales Year Automobile Sales
1990 116 1977 119
1991 105 1998 34
1992 29 1999 34
1993 59 2000 48
1994 108 2001 53
1995 94 2002 65
1996 27 2003 111

(a) Determine the least squares regression line.
(b) Determine the predicted value for 2004.
(c) Determine the MAD.
(d) Determine the unadjusted forecasting MSE.

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Solution Summary

The expert determines the MAD and the unadjusted forecasting MSE.

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LEAST SQUARES REGRESSION LINE
For the data below
Year Automobile Sales Year Automobile Sales
1990 116 1997 119
1991 105 1998 34
1992 29 1999 34
1993 59 2000 48
1994 108 2001 53
1995 94 2002 65
1996 27 2003 111

(a) Determine the least squares regression line.
Y X
Year Automobile sales y =average of sales x =average of year (Y-y) (X-x) (Y-y)(X-x) (X-x)2
1990 116.00 1.00 71.57 7.50 44.43 -6.50 -288.79 42.25
1991 105.00 2.00 71.57 7.50 33.43 -5.50 -183.86 30.25
1992 29.00 3.00 71.57 7.50 -42.57 -4.50 191.57 20.25
1993 59.00 4.00 71.57 7.50 -12.57 -3.50 44.00 12.25
1994 108.00 5.00 71.57 7.50 36.43 -2.50 -91.07 6.25
1995 94.00 6.00 71.57 7.50 22.43 -1.50 -33.64 2.25
1996 27.00 7.00 71.57 7.50 -44.57 -0.50 22.29 0.25
1997 119.00 8.00 71.57 7.50 47.43 0.50 23.71 0.25
1998 34.00 9.00 ...

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  • B. Sc., University of Nigeria
  • M. Sc., London South Bank University
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