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Topic 5
Agenda
Background
Example with Real Data
Some Considerations
Key Terms
Summary
Background
Multiple Linear Regression is widely
used in academics and also in MR
We can consider it the start of
Multivariate Analysis, for our course
Any idea what the following are:
Multivariate analysis
Multiple Linear Regression (MLR)
Background
Multivariate analysis is hard to define well
Some say anytime you have more than 2
variables, it is multivariate
Some say that you need to have many
combinations of variables i.e. variates
Some say that you need to have multiple
dependent variables
Background
Discriminant analysis
Cluster Analysis
Conjoint analysis
Canonical Correlation
Structural Equation Modeling
Background
Different levels of an independent variable
are associated with corresponding changes
in the dependent variable
What is an IV? What is a DV?
IV is denoted by X, while DV is denoted Y
We can loosely say X causes Y
Background
Normally, the IV & DV continuous,
not discrete
Meaning?
Background
X
Background
Let us plot the points
Drawing a line of best fit is childs play
The association is perfectly linear
Background
The sum of least squares is followed
Different lines are fitted, the errors
squared and the line with the sum of
least squares is chosen finally
Sometimes, MLR is called OLS or
Ordinary least squares
Background
The idea is 2-fold
We cancel out +ve and ve errors
We penalise large errors
Some Considerations
Can also handle non-metric or
categorical IVs e.g. gender influences
shopping time
This is called dummy coding
Basically dummy regression is the same
as an ANOVA
Both are forms of the General Linear
Model
Some Considerations
There should be not be collinearity between
the IVs
This creates biased estimates
First step is therefore to get the correlation
matrix in Excel/SPSS
How to remove this collinearity?
Some Considerations
The shot-gun approach should be avoided
MR firms may not agree
Some Considerations
X
1
2
3
4
5
6
7
8
Y
1
4
9
16
25
36
49
64
Some Considerations
SPSS will give you a decent
regression but it misses the point
Have to use polynomial regression,
beyond scope
Some Considerations
Ideally have some likely results in
mind before going in for data
collection
MR firms screw up here
We academics score big here
Why is this important?
Some Considerations
In exploratory research, ok to use it
Not a big fan of stepwise
Summary
MLR is a very useful tool
It has wide applications