Module 2 - Simple Linear Regression and Applications

Simple Linear Regression and Applications (with Excel)

Module Objectives:

1. Introduce a business problem that can be analyzed with simple linear regression. (Part 1)

2. Introduce the student to Excel and how linear regression can be completed within Excel. (Part

2)

3. Use data simulations to understand when/if simple linear regression gives us ‘good”

estimates. (Part 3)

4. Give the student an opportunity to use Simple Linear regression in an application. (part 4)

This module is about using data to make decisions using a common and very useful tool – Linear Regression. To do this, you need to perform the analysis in Excel. This is easily done and will be done in the first two parts (see the outline below). The purpose of the first two parts are merely to get to you perform the analysis. The rest of the material (i.e. Parts 3 and 4) are designed to get you to understand the analysis and on how we can use that analysis to make decisions.

Below is the outline of this module. The module will be broken into 4 parts. These are described below and you need to tackle them in order (i.e. part 1 then part 2, ...).

Part 1. Introduction

This part will outline some needed information and introduce a problem which will drive our investigation of the Simple Linear Regression model.

Part 2: Introduction to Excel

This part will help build the competencies in Excel that you will need to start using the Simple Linear Regression model. The topics are,

a. Random number generation

b. Creating Scatter Plots

c. Adding Trendlines to Scatter Plots

d. Running a Simple Linear Regression on data

Part 3: Understanding the Simple Linear Regression Model

This part will introduce sufficient conditions to ensure that the Simple Linear Regression Model gives you good estimates. We will quickly discuss what conditions are crucial and which conditions are less crucial. We will use data simulation to become confident in the ability of the model to produce reliable results and investigate the error term and what happens when we break some conditions.

Part 4: Assessment Project

In this part you will be asked to apply the Simple Linear Regression model to the problem introduced in Part 1 and submit your work as a graded deliverable.

Updated: 6/22/2019

This document and all material in this course (BAN 602) is the property of Dr. Curtis R. Price and cannot be distributed or rec