Regression; doesn’t sound good right? doesn’t sound like anything positive can be associated with it. By the sheer meaning of the word, you wonder why anyone will think to call something useful “regression” it may have a funny connotation (just check the synonyms you will understand better what I mean). Moving on to the statistical view of regression, it is an analytical method used to study the relationship between a dependent variable and a single or several independent variables. There are two types of regression analysis depending on the number of variables. Regression has practical applications in several fields some of which I have listed below.
- Prediction- Regression analysis is used in prediction and one of the most common uses is in prediction of stock prices based on history and economic indicators or in prediction of sales volume given historical data in a given period.
- Causation- It can help in identifying the cause of certain behaviours by determining if there is a relationship and to what degree between two variables. For example, customer experience teams may use it to determine the connection between a given demography and their customer churn rate.
- Forecasting: Regression analysis can also be used to forecast future occurrences based on historical data. For example, used in weather forecasting.
- Trend Analysis: It can also be used to analyse tendencies of occurrence of an event over time, to make decisions in various fields.
Some of the uses in our daily living include.
- Analysing the relationship between your different study patterns or intensity and how well you perform in an exam thereafter.
- Analysing the relationship between your earnings and how you spend money. For example, do you spend a lot when you feel like you have a lot in the bank or are you more careful or what triggers good or bad spending habits in you.
- Analyse if your weight gain or otherwise is related to how much food you consume or the kind of food you consume per time. Do you lose more weight when you exercise alone or do you have to combine exercise with a healthy diet to achieve your weight loss goals.
- To analyse if to buy a house at a certain price in a certain area, to determine if it will be a worthwhile investment in the long run based on historical data on the price increase in that area.
Examining the applications of regression analysis, and taking out all the seemingly complicated mathematical expressions, to me it simply means looking at your past to determine the future, isn’t that how life is? While it is important to keep moving forward no matter how bad or good the past has been, it is also important not to forget the events of the past that generated good results or the mistakes of the past that landed you in some dark places.
In summary, regression analysis like linear programming, is a tool that can be used to analyse data to make informed and effective decisions.
