In: Statistics and Probability
How do I explain the following regression result in terms of the coefficients of each dependent variable on the independent variable which is revenue
SUMMARY OUTPUT | |||||
Regression Statistics | |||||
Multiple R | 0.997839 | ||||
R Square | 0.995683 | ||||
Adjusted R Square | 0.990286 | ||||
Standard Error | 753750.6 | ||||
Observations | 10 | ||||
ANOVA | |||||
df | SS | MS | F | Significance F | |
Regression | 5 | 5.241E+14 | 1.048E+14 | 184.4968493 | 8.11978E-05 |
Residual | 4 | 2.27256E+12 | 5.681E+11 | ||
Total | 9 | 5.26373E+14 | |||
Coefficients | Standard Error | t Stat | P-value | Lower 95% | |
Intercept | 1866377 | 824571.4499 | 2.2634507 | 0.086350341 | -423000.5781 |
SQFT (x1) | 186.4999 | 6.709995639 | 27.794335 | 9.96753E-06 | 167.8699299 |
Population (x2) | 62.95023 | 5.336191975 | 11.796845 | 0.000295505 | 48.13458323 |
Manager A | 4163155 | 636926.1245 | 6.5363225 | 0.002830839 | 2394764.135 |
Manager B | 2109981 | 693293.1413 | 3.0434186 | 0.038273892 | 185090.9244 |
Manager C | 2721259 | 800988.7528 | 3.3973752 | 0.027343382 | 497357.9826 |
The regression equation for the predicted variable revenue would be as follows:
Predicted Revenue = 1866337 + SQFT*(186.4999) + Population *(62.95023)+ Manager A *(4163155) + Manager B *(2109981) + Mnager C *(2721259)
Predicted Revenue is dependent of the coefficients as follows:
Intercept value is the minimum value revenue when all other variables are zero.
Every one unit change in SQFT, the predicted revenue would be changed by 186.4999 units
similarly, every one unit change in Population, the predicted Revenue would change by 62.95023 units
For every one unit change in Manager A, Manager B and Manager C, the predicted Revenu will be affected by 4163155, 2109981, 2721253 units respectively.
This is how we use coefficients in interpreting a regression equation.