Title 3.3. Interpreting Linear Regression.pdf ✅

pacmann.io © 2022 – Pacmann AI 20 Interpreting Linear Regression Coefficient
pacmann.io © 2022 – Pacmann AI 21 Interpretation of Coefficients Say we have linear regression model that tells the relationship between completion of college degree and hourly wage
pacmann.io © 2022 – Pacmann AI 22 Interpretation of Coefficients We can interpret the coefficient of college degree in two different ways The predictive interpretation The counterfactual interpretation Compare two person that graduate from college and do not graduate, the expected difference of their wage is 3 Graduating college degree would lead to expected increase 3 in hourly wages.
pacmann.io © 2022 – Pacmann AI 23 There are two general interpretations of the regression coefficients Interpretation of Coefficients ● How the outcome variable differs, on average, ● By comparing two groups of items that differ by 1 in the relevant predictor, ● While set the same in all the other predictors ● Expected change within individual in outcome variable, ● Caused by adding 1 in relevant predictor variables, ● While set the same in all the other predictors The predictive interpretation The counterfactual interpretation