Predictive Analytics : QM901.

1x
Prof U Dinesh Kumar, IIMB

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 Predictive Analytics : QM901.1x
Prof U Dinesh Kumar, IIMB

Interpretation of Regression Coefficients

The interpretation depends on the functional form of the

relationship between the response and the explanatory
variables.

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 Predictive Analytics : QM901.1x

Coefficients Interpretation
Prof U Dinesh Kumar, IIMB

• The intercept, 0, is the mean value of the dependent

variable Y, when the independent variable X = 0

• The slope, 1, is the change in the value of the dependent

variable, Y, for unit change in the independent variable X.

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 Predictive Analytics : QM901.1x
Prof U Dinesh Kumar, IIMB

Interpretation of the intercept β0

• The intercept, 0, is the mean value of the dependent variable Y,

when the independent variable X = 0

• Y = 129110.79 + 1807.591 x Body Weight

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 Predictive Analytics : QM901.1x
Prof U Dinesh Kumar, IIMB

Interpretation of the intercept β1

• The slope, 1, is the change in the value of the dependent

variable, Y, for unit change in the independent variable X.

• Y = 129110.79 + 1807.591 x Body Weight

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 Predictive Analytics : QM901.1x
Prof U Dinesh Kumar, IIMB

Interpretation of β0 and β1 in ln(Y) = β0 + β1 ln(X)

Differentiating the equation with respect to X, we get:

β1 is the percentage change Y for percentage change in X.

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