identify the estimated simple linear regression equation.

Thus, a point estimate of the mean quarterly sales for all restaurant locations near campuses with 10,000 students is $110,000. Using the estimated regression equation y = 60 + 5x, we see that for x = 10 (10,000 students), y = 60 + 5(10) = 110. For example, suppose Armand’s managers want to estimate the mean quarterly sales for all restaurants located near college campuses with 10,000 students.

If a significant relationship exists between x and y and the coefficient of determination shows that the fit is good, the estimated regression equation should be useful for estimation and prediction.įor the Armand’s Pizza Parlors example, the estimated regression equation is y = 60 + 5x.Īt the end of Section 14.1, we stated that y can be used as a point estimator of E(y), the mean or expected value of y for a given value of x, and as a predictor of an individual value of y. We then use the least squares method to obtain the estimated simple linear regression equation. When using the simple linear regression model, we are making an assumption about the relationship between x and y.

Identify the estimated simple linear regression equation.