Multiple Regression Model

What is the impact of more than one independent variable on a dependent variable. This is explained by Multiple Regression Model.

y = b0 + b1x1 + b2x2 + e

where b0 = constant intercept on the y-axis

b1 , b2 – slope coefficients of the independent variables.

x1, x2 – independent variables

e = Error term which is difference between calculated value of y – actual value of y

The above equation can be put into use only if the coefficients are significant. This is confirmed using hypothesis test.

Hypothesis testing can be one tailed or 2 tailed.

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