How to Automatically Calculate the Multiple Regression Analysis in Excel using Matrix Algebra Form
Good day and welcome to this wonderful episode of Statistics Video Tutorial. I still remember when I was in School taking up my Degree in Statistics and I terribly missed the traditional method of teaching wherein my professor was trying to teach how to calculate or compute Statistical Test without the use of a Computer Software.
I am very much thankful that I
was able to experience this way of teaching because I was able to understand
the concept, rationale and how the formula was derived.
Because of the utilization of Computer
Software, there are other steps and procedures which often neglected and
set-aside. In a Machine Learning Model such as Multiple Regression, it is a
must to understand the behavior and pattern of the data before performing the
modelling part. One should test the assumptions involved in a Machine Learning Model.
If any of the assumptions is/are violated, it is predominantly important to address
the violation, to fix the violated assumptions and once its done, then it is
the time that we can start building the model and choosing the best model.
One effect of using Computer
Software is the people forget how to compute statistics manually by following
the formula guided procedures such as calculating the Sum of Square Regression,
Sum of Square Residuals, Mean Square Regression, Mean Square Residuals, F-Ratio,
etc. This is one of the main reasons why some of the analysts nowadays don’t
understand the behavior of the data if for example, what happened to the R Square
if you remove one Independent Variables. Will it go high or go down? If the R
Square Change go down because of removing an independent variable, what does it
mean? Is it good? Does is affect the accuracy or reliability of the Model?
These are the things that we
should consider if we want to build a highly reliable and valid model.
In this Video, I am going to discuss
few of the concepts and steps to calculate a Multiple Regression. I will be
going to discuss and show how to do Multiple Regression using SPSS, using
Microsoft Excel Data Analysis Add-ins, and using the Matrix Algebra Procedures.
As you noticed, it is easy to
compute Statistics using Computer Software – SPSS, very straightforward. It is
also easy to use the Microsoft Excel Data Analysis Add-ins.
Now, I am going to show you how
to calculate Multiple Regression in Excel using Matrix Algebra. Using this
Method, I am going to introduce certain key terminology such as Matrices,
Inverse Matrix, Transpose Matrix and Vectors. I am also going to introduce
certain functions such as Transpose, mmult and minverse. These are the functions
we will be using for us to calculate the Slope of the Xs and the Intercept in a
Multiple Regression Model.
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