Understanding Regression Analysis in Business Forecasting
Regarding the analytical structural regression as a model for forecasting analytics, it is similar to most research designs that employ numerical data and statistics. One or several independent variables have a specific type of one-way linkage with a dependent variable (Cote, 2021). When applied to business factors of interest to one for prediction, regression shows how alterations of one source of influence most likely will impact the other.
Distinguishing Correlation from Causation in Research
Further, I will provide insights I was able to draw from the article “What is regression analysis in business analytics” by Cote (2021). The online article was also educational about links between variables, as it explained to me which one a person can distinguish with regression analysis. I already knew that in the field of research and statistics, only two types of relationships between variables exist: correlational and causal.
Moreover, I was aware that it is wrong to think that if the former is found, the latter is also present. Cote (2021) mentions “to never assume correlation implies causation” too (para. 10). The new knowledge for me was that regression cannot be applied by design as model causal forecasting. To perform this, one will need to select and employ an experimental exploration method.
Single vs. Multiple Regression Models
I learned from the article that there are a pair of basic regression analysis equations. Single variable linear regression is applied when one is interested in predicting the relation of only two factors or when only two of these are involved in the situation (Cote, 2021). Multiple regression is applied similarly, allowing the individual to consider and analyze a small combination of independent variables (Cote, 2021).
Applications of Regression and Data Handling
Another helpful piece of information is that a large number of data-handling programs exist that make it easy to evaluate regression and foresee the most likely course of action in an economic setting.
Reference
Cote, C. (2021). What is regression analysis in business analytics? Harvard Business School Online. Web.