2.1.2.0 OBJECTIVE The main objective of this unit is to acquaint students with the rudiments of identifying and differentiating simple equation model from multiple regression. 2.1.3.0 MAIN CONTENTS 2.1.3.1 Simple Regression Analyses The correlation coefficient may indicate that two variables (bivariate regression model) are associated with one another, but it does not give any idea of the kind of relationship involved. While regression predicts the value of the dependent variable based on the known value of the independent variable. In this module further step is taken for cases which we are willing to hypothesize on, than one variable dependence on another. It must be statedimmediately that one would not expect to find an exact relationship between any two economic variables unless it is true as a matter of definition. In textbook expositions of economic theory, the usual way of dealing with this awkward fact is to write down the relationship as if it were exact and to warn the reader that it is only an approximation. However, in statistical analysis, one acknowledges the fact that the relationship is not exact by explicitly including in it a
