Excel Linear Regression Download It From

With its different flavors, regression analysis covers a width swath of problems.

Another great reason to use it, is that regression tools are easy to find.

Excel Linear Regression Download It From

If you would like to follow along with the exercise, please download it from the link below.

The general idea, as seen in the picture below, is finding a line of best fit through the data.

I highly the Khan Academy video posted below if you are looking to brush up on your statistics.

This example data set shows us the years of service and salary of 39 employees for an imaginary company.

Excel scatter charts set the left most column of the data set to the X Axis by default.

Do you see a pattern Can you see where you might be able to draw a line through the data.

Sometimes the scattering of data will be so random that there will no need to go forward with a linear regression.

Learning to look for patterns in data visualizations is skill worth developing.

We call it positive because it appears that as X increases so does Y.

So now that our scatter chart has passed the visual test, it is time perform our regression.

Simply click on your scatter plot from the Ribbon select Chart Tools Design Add Chart Element Trendline Linear.

I personally find the line a little hard to see as is, so I am going to format it a bit.

Now I know I said I was not going to get too deep into the math, but I feel I cant do this subject justice without at least a cursory explanation of what is going on.

What does that mean Well if you wanted to attempt this by hand, one approach you could take would be to start by drawing a line that looked best to you.

You would then measure the Residuals (the distance from the actual data points and line you drew).

In our equation a person with 0 years in service would have a salary of 50974: Y 1357.9(0) 50974 Y 50974.

And each year of service would add 1357.90 to the salary.

If more data is not available though, you can look at your outliers as Linear Regression can be greatly affected by outliers.

A person with 1 year of service making 100,000 a year would definitely be an outlier, but it is not an impossibility.

If this employee is a highly experienced individual who just transferred from another company, it is totally feasible they could be earning 100,000.

That is okay though, we will chalk this up as a learning experience and move on.

Excel Linear Regression For Mac