# Simple linear regression

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## Simple linear regression

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

## Simple Linear Regression

In statistics, the analysis of variables that are dependent on only one other variable. Regression analysis uses regression equations, which shows the value of a dependent variable as a function of an independent variable. For example, a simple regression equation could take the form:

y = a + bx

where y is the dependent variable and x is the independent variable. In this case, the slope is equal to b and a is the intercept. When plotted on a graph, y is determined by the value of x. Regression equations are charted as a line and are important in calculating economic data and stock prices. See also: Multiple regression.

y = a + bx

where y is the dependent variable and x is the independent variable. In this case, the slope is equal to b and a is the intercept. When plotted on a graph, y is determined by the value of x. Regression equations are charted as a line and are important in calculating economic data and stock prices. See also: Multiple regression.

Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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