Question

In a multiple regression where we have variables x1 and x2, how do we interpret the estimated coefficient on x1 (what we call b1)?

Answer 1

In a multiple regression where we have variables x1 and x2, we interpret the estimated coefficient on x1 (what we call b1)

when x1 goes up by one unit, then predicted y goes up b1 value. Here we need to be careful about the units of x1. Say, we are predicting rent from square feet, and b1

say happens to be 2. Then we would say that when square feet goes up by 1, then predicted rent goes up by $2...This is the interpretation of b1....in this way we interpret the estimated coefficient on x1 (what we call b1)...

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