Regression analysis is a powerful statistical tool used to establish the relationship between two variables. Specifically, it is used to predict how changes in one variable will affect the other. Regression analysis comes in different types, including linear regression, non-linear regression, polynomial regression, etc. In this article, we will focus on linear regression and how to create a linear regression graph in Excel 2007, Excel 2013, and later versions.
What is Linear Regression?
Linear regression is a statistical approach that involves fitting a straight line to a data set to establish the relationship between two variables. The two variables are the dependent variable (y-axis) and the independent variable (x-axis). The purpose is to estimate the values of the dependent variable, given the values of the independent variable.
There are two types of linear regression: simple linear regression and multiple linear regression. Simple linear regression involves one dependent variable and one independent variable, while multiple linear regression involves one dependent variable and two or more independent variables.
Linear regression is valuable in finance, marketing, psychology, engineering, medicine, social sciences, and many other fields where there is a need to establish the relationship between two variables.
How to Create a Linear Regression Graph in Excel 2007
In Excel 2007, creating a linear regression graph involves running a regression analysis and then adding a linear trendline and an equation to the chart.
- Enter the data into Excel, making sure the independent variable is in one column and the dependent variable is in another column.
- Select the data and click on the “Insert” tab on the ribbon.
- Click on the “Scatter” chart type and select the chart style of your choice. The data points should be plotted onto the chart.
- Right-click on one of the data points on the chart and select “Add Trendline”.
- In the “Format Trendline” window, check the box for “Linear Trendline”.
- Check the box for “Display Equation on chart”.
- Click “Close” to exit the window.
- The chart should now have a linear trendline and equation displayed on the chart.
How to Create a Linear Regression Graph in Excel 2013 and Later Versions
In Excel 2013 and later versions of Excel, creating a linear regression graph is easier and involves the following steps:
- Enter the data into Excel, making sure the independent variable is in one column and the dependent variable is in another column.
- Select the data and click on the “Insert” tab on the ribbon.
- Click on the “Charts” dropdown arrow in the “Charts” group and select “Scatter”.
- Select the chart style of your choice. The data points should be plotted onto the chart.
- Select one of the data points on the chart and click on the “+” icon that appears to the right.
- Check the box for “Trendline”.
- Select “Linear” from the dropdown menu of trendline types.
- Check the box for “Display Equation on chart”.
- Click “Close” to exit the window.
FAQ About Linear Regression in Excel
What is the purpose of a regression analysis?
The purpose of a regression analysis is to establish the relationship between two variables. Specifically, it is used to predict how changes in one variable will affect the other. Regression analysis is used in many fields, including finance, marketing, psychology, engineering, medicine, social sciences, and others.
What is the difference between simple linear regression and multiple linear regression?
The difference between simple linear regression and multiple linear regression is the number of independent variables. Simple linear regression involves one dependent variable and one independent variable, while multiple linear regression involves one dependent variable and two or more independent variables.
Video: How to Create a Linear Regression Graph in Excel
Conclusion
Linear regression is a valuable statistical tool used to establish the relationship between two variables. It is used in many fields and is relatively easy to create using Excel. Creating a linear regression graph in Excel involves running a regression analysis and adding a linear trendline and equation to the chart. While the process may differ slightly depending on the version of Excel being used, the basic steps remain the same.
