Introduction to Least-Squares Modeling

13 Pages Posted: 21 Oct 2008

See all articles by Phillip E. Pfeifer

Phillip E. Pfeifer

University of Virginia - Darden School of Business

Abstract

This note, the first in a series on regression analysis, introduces the simple linear model (one X-variable), together with least squares, as a procedure for estimating the coefficients in the model. The standard error of estimate, adjusted R-square, and standard error of the coefficients are all introduced and explained. The presentation of formulas is kept to a minimum, and an illustrative example is used throughout the note. This note replaces UVA-QA-0270.

Excerpt

UVA-QA-0500

Rev. Oct. 8, 2014

INTRODUCTION TO LEAST-SQUARES MODELING

Palo Alto Products had a long history of bidding against Sunnyvale Systems for batches of transistors supplied by the Fairway Instruments Company. In preparation for its upcoming bid, Palo Alto compiled the data in Table 1, summarizing Sunnyvale's recent bidding history. Palo Alto suspected that Sunnyvale's bids were based primarily on Fairway's estimated number of good transistors in each batch. Fairway had estimated that the upcoming batch of 70,000 contained 52,500 good transistors.

Table 1. Sunnyvale's past bids.

Estimated Number of Good Transistors

. . .

Keywords: model evaluation, regression analysis

Suggested Citation

Pfeifer, Phillip E., Introduction to Least-Squares Modeling. Darden Case No. UVA-QA-0500. Available at SSRN: https://ssrn.com/abstract=1283428

Phillip E. Pfeifer (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4803 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/Pfeifer.htm

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