Multiple Linear Regression Model
The multiple linear regression model is a
probabilistic model that investigates the dependence of a response variable on
more than one predictor with the goal to estimate the average value of the
response variable.
The linear statistical model of multiple linear
regression model with “p” predictors is given by;
The multiple linear regression model is the extension
of simple linear regression model, in which the response variable is a linear
function of one predictor where as multiple linear the response variable is a
linear function of more than one predictor.
For example; wage of an employee as a function of
education level, experience, training, etc. and if wage is regress on education
level, then it can be represented as:
Regression Model with two Regressors
A regression model
that investigates the dependence of a variable on two regressor only is the
simplest form of multiple regression model with certain assumption is called
multiple linear regression model.
Estimation of Parameters
The OLS method is used
to estimate the parameters of the model. It is achieved by minimizing the sum
of squares residual.
Practice Question
Construct regression model for the following data:
Solution:
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