Simple Regression Model: Defines relationship between a dependent variable, and a single independent predictor variable. The equation for this relationship:
Simple Linear Regression
Prediction of Diamond Prices using Linear Regression
WC Hoh
Retired
Slide 2
Slide 3
Diamond Dataset:
48 observations of 2 variables: price and weight
Using the following linear regression equation:
fit <- lm(price ~ carat, data=diamond)
the relevant coefficients are:
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## (Intercept) carat
## -259.6259 3721.0249
A Plot to show the linear relationship between the price and weight in carats
Prediction equation:
As an example, if weight=0.2 carats, the predicted price will be:
price = coef(fit)[1] + coef(fit)[2]*0.2
price # In Singapore dollars
## (Intercept)
## 484.5791