How to Analyze the Regression Analysis Output from Excel

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Issue:

Technology

 

Written by:

Robyn T

 

Date added:

August 18, 2014

 

Level:

University

 

Grade:

A

 

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4 / 984

 

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? is the intercept of the regression line, and ? is the slope of the regression line. e is the random disturbance term. The way to interpret the above equation is as follows: Y = ? + ?X (ignoring the disturbance term “e”) gives the average relationship between the values of Y and X. For example, let Y be the cost of goods sold and X be the sales...
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If ? = 2 and ? = 0.75, and if the sales are 100, i.e., X = 100, the cost of goods sold would be, on average, 2 + 0.75(100) = 77. However, in any particular year when sales X = 100, the actual cost of goods sold can deviate randomly around 77. This deviation from the average is called the “disturbance” or the “error” and is represented by “e”...
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