Question

One of our weekly goals is to explain how the equations created by regression can be used to make predictions about responses we may not be able to observe directly. In your initial discussion post, demonstrate your ability to explain and illustrate this function in your own words. How can regression be used to predict future performance? Illustrate and support your answer with a real-life or hypothetical example drawn, if possible, from your professional field.

Answer 1

REAL LIFE EXAMPLE FROM OUR PROFESSIONAL FIELD ON HOW TO PREDICT FUTURE PERFORMANCE USING REGRESSION:

Suppose we have collected the following data regarding age (X) in years of cars and annual maintenance cost (Y) in hundred dollars:

X   1      3        5      7      9

Y   15    18      21    23   22

The Equation created by the Regression for the above data is:

                          (1)

TO PREDICT FUTURE PERFORMANCE:

To predict the annual maintenance cost after 10 years, put X = 10 in (1). We get:

So, prediction of annual maintenance cost after 10 years = 24.55 hundred dollars