Regression Wisdom
Objectives: Understand that we
cannot fit linear models or use
linear regression if the
underlying relationship between
the variables is not itself linear.
Understand that data used to
find a model must be
homogeneous. Look for
subgroups in data before you
find a regression, and analyze
each separately..
Chapter 9
Regression Wisdom
Statistics as the art of
distilling meaning from
data. In choosing that
term we mean to imply
that what we do is not
merely algorithmic or
formulaic.
We have to Think. We
have to consider the
circumstances, check the
conditions, and choose
Copyright 2010 Pearson Education, Inc.
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Subsets
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Subsets (cont.)
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Extrapolation (cont.)
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Extrapolation (cont.)
They seemed to have missed a sharp run-up in oil prices in the past
few years.
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The red line shows the effects that one unusual point can
have on a regression:
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Warning:
Influential points can hide in plots of residuals.
Points with high leverage pull the line close to
them, so they often have small residuals.
Youll see influential points more easily in
scatterplots of the original data or by finding a
regression model with and without the points.
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