Before running the regression, predict what sign each variable will be and explain why you make that prediction.

Bus 3059 Week 4 Business Analysis Assignment 3: Multiple Regression

It is crucial to predict the direction each variable will take before running the regression to understand the impact they can have on the model. For instance, if one variable is positively correlated with another – then this would imply that as one increases, so will the other – resulting in a positive relationship. In the opposite case, two variables that are negatively associated should increase together (with a negative sign).

In addition, patterns are also visible when examining different relationships among variables. This can help to inform the expectations of signs before running a regression. For example – factors related to economic growth or consumer spending often tend to have positive correlations while those tied to risk aversion typically show negative associations.

Ultimately, by making educated guesses about which way signs should go based on prior knowledge and existing data – researchers can create more accurate models that provide meaningful insights into underlying trends and their potential impacts.