Practical AI for Business Leaders, Product Managers, and Entrepreneurs by Alfred Essa Shirin Mojarad

Author:Alfred Essa, Shirin Mojarad
Language: eng
Format: epub
Publisher: De Gruyter
Published: 2022-04-04T10:39:41.361000+00:00

Regression Summary

When we run the regression, we obtain the results shown in Figure 11.8. The summary contains a lot of information and seems forbidding at first glance. We focus on three items: p-values as reported in the column P > |t|, values of the coefficients as listed in the coef column, and the value of R-squared.

Figure 11.8 Summary of Multiple Linear Regression, Round One.

Statistical Significance

What is p-value? Conceptually it tells us how confident we can be about the estimates of the values of the coefficients. The p-values for GPA, Sleep, and Time are less than .05. Therefore, we interpret the result as statistically significant. The p-value for Income, however, is much greater than .05, the actual value being .395. This means that the estimate of the coefficient for Income is not statistically significant.

What does this mean practically? Going back to our analogy of solving a murder mystery, it means that the statistical evidence associating Income with exam Grade is weak. The two items are not likely to be related.

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