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We must be careful when interpreting the meaning of association. Although two variables may be associated, this association does not imply that variation in the independent variable is a cause of variation in the dependent variable (or vice versa). For instance, age and income are usually related. However, a mere increase in age does not cause an increase in income. We can determine the presence or absence of association through statistics. However, there is no basis for concluding that a cause-effect relation exists between these variables.
Accident proneness A personal psychological issue which affects the individual's probability of suffering the accident. The concept has been studied statistically under the num
why we use dummy variable
The 4 assumptions of regression: 1. Variables are normally distributed 2. Linear relationship between the independent and dependent variables 3. Homosced
Angle Count method The method for estimating the proportion of the area of a forest which is in fact covered by the bases of trees. An observer goes to each of the number of po
While there are p original variables the number of principal components is m such that m
Suppose the money supply process is now represented by the following function: where m measures the sensitivity of money supply with respect to the interest rate. (i) Us
In simple regression the dependent variable Y was assumed to be linearly related to a single variable X. In real life, however, we often find that a dependent variable may depend o
The mean tax-return preparation fee H&R Block charged retail customers in 2012 was $183 (The Wall Street Journal, March 7, 2012). Use this price as the population mean and assume t
Standard Error The measure of reliability of the estimating equation that we have developed is given by standard error of estimate. The standard error of estimate represented b
A researcher computed the F ratio for a four-group experiment. The computed F is 4.86. The degrees of freedom are 3 for the numerator and 16 for the denominator. 1. Is the computed
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