Microsoft Office Tutorials and References

In Depth Information

**Multi-Regression**

Even though our R
2
is high, 0.8043, we may be able to find more variables to

add to our model that may increase R
2
, resulting in a better model. We may find out,

for example, that if an apartment is in the center of the city, its price is higher than its

counterpart in the suburbs. Additionally, if an apartment has a balcony or if it is a

corner apartment, it has a different value.

The example in the chapter

’

s workbook has additional sheets, variables, and

data.

This last example will use all the variables in the workbook to determine Price:

Apartment Size, Bathrooms, City location, Corner, and Balcony. See Figure 14.6.

You will be asked at the end of the chapter to solve the same example with fewer

variables.

The data collected has Yes and No telling us whether an apartment is in the city

or not. It has the same Yes/No for the other information (Corner and Balcony). In

order to run the regression we have to use numerical data in Excel. We have to

change the Yes/No data to be 1 or 0. To accomplish this, we use CTRL

þ

H (Replace)

FIGURE 14.6
The Data before and after Replacing the Yes with 1 and No with 0