1 representing a negative correlation, and 0 representing no relationship. Simple linear regression describes the linear relationship between a response variable (denoted by y) and an explanatory ...

Thus, the positive correlation between higher earnings and education levels may reflect innate aptitude, rather than the effects of education. Before a regression is run, a theoretical model can help ...

This is easily handled in a regression framework. Regression uses qualitative ... variables in addition to the qualitative variables in order to account for correlation in the data and reduce MSE; ...

In the case of a simple two-variable regression, one has to think of the other factors that might explain the dependent variable. In our example, even when IQ is included, the correlation between ...