Share
Explore BrainMass

Regression and Correlation Assumptions

1) When is regression used? What are the assumptions of Linear Regression?
2) What is correlation? How does it differ from regression? What is the interpretation of the correlation coefficient?

Solution Preview

1) When is regression used? What are the assumptions of Linear Regression?

Correlation and regression analysis are both used to investigate relationships between two variables (x and y).

In a linear regression, you fit the data to a model of the form

where α and β are the parameters of the model (the y-intercept and the slope of the line) and ε is the error term (each data point has a corresponding εi term, which shows how far away from the line the point falls).

You assume ...

$2.19