Page 11 - Regression Guideline for AMC
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Understanding regression mechanics
• As men6oned, regression modeling analyzes the rela6onship between a set of predictors and a dependent variable. As such, it “regresses” or “explains” how the dependent variables increases or decreases in value based on the predictors in the model.
• Regression models the varia6on in the dependent variable based on how much of that varia6on can be a.ributed to the predictors in the model. Good models have predictors strongly associated with the dependent variable, in this case sales price.
• The basic regression equa6on is informa6ve to view (for a moment only, don’t worry!) and will help explain important concepts relevant to assessing model fit.
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