In this section we test the value of the slope of the regression line.

**Observation**: By Theorem 1 of One Sample Hypothesis Testing for Correlation, under certain conditions, the test statistic *t* has the property

But by Property 1 of Method of Least Squares

and by Definition 3 of Regression Analysis and Property 4 of Regression Analysis

Putting these elements together we get that

Since by the population version of Property 4 of Regression Analysis

it follows that *ρ* = 0 if and only if *β* = 0. Thus Theorem 1 of One Sample Hypothesis Testing for Correlation can be transformed into the following test of the hypothesis H_{0}: *β* = 0 (i.e. the slope of the population regression line is zero):

**Example 1**: Test whether the slope of the regression line in Example 1 of Method of Least Squares is zero.

Figure 1 shows the worksheet for testing the null hypothesis that the slope of the regression line is 0.

**Figure 1 – t-****test of the slope of the regression line for data in Example 1**

Since p-value = .0028 < .05 = *α* (or |*t*| = 3.67 > 2.16 = *t _{crit}*) we reject the null hypothesis, and so we can’t conclude that the population slope is zero.

Note that the 95% confidence interval for the population slope is

*b* ± *t _{crit} · s_{b} *= -628 ± 2.16(.171) = (-.998, -.259)

**Observation**: We can also test whether the slopes of the regression lines arising from two independent populations are significantly different. This would be useful for example when testing whether the slope of the regression line for the population of men in Example 1 is significantly different from that of women.

Click here for additional information and an example about Hypothesis Testing for Comparing the Slopes of Two Independent Samples.

**Excel Functions:** where R1 = the array of observed values and R2 = the array of observed values.

**STEYX**(R1, R2) = standard error of the estimate *s*_{y∙x} = SQRT(*MS _{Res}*)

**LINEST**(R1, R2, TRUE, TRUE) – an array function which generates a number of useful statistics.

To use LINEST, begin by highlighting a blank 5 × 2 region, enter =LINEST( and then highlight the R1 array, enter a comma, highlight the R2 array and finally enter ,TRUE,TRUE) and press Ctrl-Shft-Enter.

The LINEST function returns a number of values, but unfortunately no labels for these values. To make all of this clearer, Figure 2 displays the output from LINEST(A4:A18, B4:B18, TRUE, TRUE) using the data in Figure 1. I have added the appropriate labels manually for clarity.

**Figure 2 – LINEST(B4:B18,A4:A18,TRUE,TRUE) for data in Figure 1**

R Square is the correlation of determination *r ^{2}* (see Definition 2 of Basic Concepts of Correlation), while all the other values are as described above with the exception of the standard error of the y-intercept, which will be explained shortly.

Excel also provides a** Regression** data analysis tool. The creation of a regression line and hypothesis testing of the type described in this section can be carried out using this tool. Figure 3 displays the principal output of this tool for the data in Example 1.

**Figure 3 – Output from Regression data analysis tool**

The following is a description of the fields in this report:

Summary Output:

- Multiple R – correlation coefficient (see Definition 1 of Multiple Correlation, although since there is only one independent variable this is equivalent to Definition 2 of Basic Concepts of Correlation)
- R Square – coefficient of determination (see Definition 1 of Multiple Correlation), i.e. the square of Multiple R
- Adjusted R Square – see Definition 2 of Multiple Correlation
- Standard Error = SQRT(
*MS*), can also be calculated using Excel’s STEYX function_{Res} - Observations – sample size

ANOVA:

- The first row lists the values for
*df*,_{Reg}*SS*,_{Reg}*MS*,_{Reg}*F*=*MS*/_{Reg}*MS*and p-value_{Res} - The second row lists the values for
*df*,_{Res}*SS*and_{Res}*MS*_{Res} - The third row lists the values for
*df*and_{T}*SS*_{T}

Coefficients (third table):

The third table gives key statistics for testing the y-intercept (Intercept in the table) and slope (Cig in the table). We will explain the intercept statistics in Confidence and Prediction Intervals for Forecasted Values. The slope statistics are as follows:

- Coefficients – value for the slope of the regression line
- Standard Error – standard error of the slope,
*s*_{b}= s_{y∙x}/ (*ss** SQRT(_{x}*n*-1)) - t-Stat =
*b*/*s*_{b} - P-value = TDIST(
*t*,*df*, 2); i.e. 2-tailed value_{Res} - 95% confidence interval =
*b*±*t*∙_{crit}*s*_{b}

In addition to the principal results described in Figure 3, one can optionally generate a table of residuals and table of percentiles as described in Figure 4.

**Figure 4 – Additional output from Regression data analysis tool for data**

Residual Output:

- Predicted Life Exp = Cig *
*b*+*a*; i.e. ŷ - Residuals = Observed Life Exp – Predicted Life Exp; i.e. y – ŷ
- Standard Residuals = Residual / Std Dev of the Residuals (since the mean of the residuals is expected to be 0): i.e.
*e*/*s*_{e}

For example. for Observation 1 we have

- Predicted Life Exp = -.63 * 5 + 85.72 = 82.58
- Residuals = 80 – 82.58 = -2.58
- Standard Residuals = -2.58 / 7.69 = -.336

Note that the mean of the residuals is approximately 0 (which is consistent with a key assumption of the regression model) and standard deviation 7.69.

There is also the option to produce certain charts, which we will review when discussing Example 2 of Multiple Regression Analysis.

Hello

I am doing multiple regression in Excel 2007. I have a one Dependent Data and 18 independent Data. But i am not to finding multiple regression at the time in all my Data.

Its give warning message like this, Only 16 column are available. can you please give me solution.?

Excel’s Regression data analysis tool is limited to 16 independent variables. You can use the Real Statistics Linear Regression data analysis tool instead. This tool supports up to 64 independent variables and is part of the Real Statistic Resource Pack, which you can download for free from this website.

Charles

Under Figure 3 below Summary Output I believe R Square – correlation of determination should be “coefficient of determination” Also, does the Real Statistics Data Analysis Tools offer variance inflation factor for linear regression? Or a scatterplot matrix feature to check for multicollinearity?

Ryan,

Thanks for catching the error. I have just changed the webpage to say “coefficient of determination”.

Regarding collinearity, please check out the webpage http://www.real-statistics.com/multiple-regression/collinearity/. The Real Statistics Resource Pack provides the VIF function for calculating the variance inflation factor.

Charles

hi, i was just wondering on how do i know which independent variables are significant and which are not?

There are a few ways at looking at this issue:

1) Check which variables have regression coefficients that are significantly different from zero. To do this you need to look at the p-values for the regression coefficients. Those that have p-value < alpha are significant. You can do this as described in the following places:

Figure 3 of Multiple Regression Analysis in Excel

Figure 2 of Real Statistics Capabilities for Multiple Regression

2) Determine which independent variables can be removed from the regression model with no significant difference in the result. See the following webpage for more information about this:

Testing Significance of Variables in the Regression Model

Charles

Hi Thanks for the post. It is very helpful. I need to calculate LOQ and LOD for my work. I used ICH guideline about standard deviation of y-intercept/slope to calculate LOQ and LOD. I used regression analysis and get the standard error of y-intercept (3rd table). I also calculated the STEYX. The two data do not match. Do they suppose to match? I am very confused. Also ICH calls for standard deviation but bot 3rd table and STEYX have the name of standard error instead of deviation, but I searched online and everybody said they are same thing. Can I send you the excel file.

Vicki,

Sorry that I missed your comment earlier. You can send me your Excel file.

Charles