| Preface | 7 |
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| Contents | 11 |
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| Introduction | 15 |
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| 1.1 Building Valid Models | 15 |
| 1.2 Motivating Examples | 15 |
| 1.2.1 Assessing the Ability of NFL Kickers | 15 |
| 1.2.2 Newspaper Circulation | 18 |
| 1.2.3 Menu Pricing in a New Italian Restaurant in New York City | 19 |
| 1.2.4 Effect of Wine Critics’ Ratings on Prices of Bordeaux Wines | 22 |
| 1.3 Level of Mathematics | 27 |
| Simple Linear Regression | 29 |
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| 2.1 Introduction and Least Squares Estimates | 29 |
| 2.1.1 Simple Linear Regression Models | 29 |
| 2.2 Inferences About the Slope and the Intercept | 34 |
| 2.2.1 Assumptions Necessary in Order to Make Inferences About the Regression Model | 35 |
| 2.2.2 Inferences About the Slope of the Regression Line | 35 |
| 2.2.3 Inferences About the Intercept of the Regression Line | 37 |
| 2.3 Confidence Intervals for the Population Regression Line | 38 |
| 2.4 Prediction Intervals for the Actual Value of Y | 39 |
| 2.5 Analysis of Variance | 41 |
| 2.6 Dummy Variable Regression | 44 |
| 2.7 Derivations of Results | 47 |
| 2.7.1 Inferences about the Slope of the Regression Line | 48 |
| 2.7.2 Inferences about the Intercept of the Regression Line | 49 |
| 2.7.3 Confidence Intervals for the Population Regression Line | 50 |
| 2.7.4 Prediction Intervals for the Actual Value of Y | 51 |
| 2.8 Exercises | 52 |
| Diagnostics and Transformations for Simple Linear Regression | 58 |
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| 3.1 Valid and Invalid Regression Models: Anscombe’s Four Data Sets | 58 |
| 3.1.1 Residuals | 61 |
| 3.1.2 Using Plots of Residuals to Determine Whether the Proposed Regression Model Is a Valid Model | 62 |
| 3.1.3 Example of a Quadratic Model | 63 |
| 3.2 Regression Diagnostics: Tools for Checking the Validity of a Model | 63 |
| 3.2.1 Leverage Points | 64 |
| 3.2.2 Standardized Residuals | 72 |
| 3.2.3 Recommendations for Handling Outliers and Leverage Points | 79 |
| 3.2.4 Assessing the Influence of Certain Cases | 80 |
| 3.2.5 Normality of the Errors | 82 |
| 3.2.6 Constant Variance | 84 |
| 3.3 Transformations | 89 |
| 3.3.1 Using Transformations to Stabilize Variance | 89 |
| 3.3.2 Using Logarithms to Estimate Percentage Effects | 92 |