Question

In the following regression equation, we are using age to predict wealth. What is the correct classification of wealth in this case? Wealth = 5.4 * (Age) - 10

Dependent variable, Independent variable, that sort of thing.

Answer 1

Here, we are interested in predicting wealth using age, it implies that:

- Age affects Wealth - Wealth is dependent on Age

Hence, Wealth would be the Response / Dependent variable and Age would be the predictor / Independent variable. The fitted regression equation would yield predicted values of Wealth for each value of Age.

Here, intercept coefficient = -10 and Slope = 5.4. Since, the slope is positive, we find that as Age and Wealth move in the same direction (As age increases. wealth also increases).