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Business Mathematics and Statistics · Ch 9 — Correlation and Regression Analysis

Regression Lines and Their Point of Intersection

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Regression Lines and Their Point of Intersection

Each regression coefficient of the previous section is the slope of a regression line, used for prediction. Since a regression line is built from data centred on the sample, both regression lines are constructed to pass through the same fixed point — the pair of means (xˉ,yˉ)(\bar x,\bar y).

Note

The Two Regression Lines

Line of yy on xx (estimates yy for a given xx): y−yˉ=byx(x−xˉ)\quad y - \bar y = b_{yx}(x-\bar x)

Line of xx on yy (estimates xx for a given yy): x−xˉ=bxy(y−yˉ)\quad x - \bar x = b_{xy}(y-\bar y)

Both equations are satisfied exactly by x=xˉ,y=yˉx=\bar x, y=\bar y (substituting these values makes both sides zero) — so the two regression lines, however different their slopes, always intersect at exactly (xˉ,yˉ)(\bar x,\bar y). This single fact is useful in both directions:

  • Given the means and the two regression coefficients, both line equations can be written directly, and their intersection verified to be (xˉ,yˉ)(\bar x,\bar y) as a check.
  • Given only the two regression-line equations (without the means stated separately), solving them simultaneously — exactly as with any pair of linear equations — recovers xˉ\bar x and yˉ\bar y, since their unique common solution point is precisely the pair of means.

Figure 1 — Scatter Diagram with Both Regression Lines Meeting at the Mean (x̄, ȳ) = (3, 4)
Figure 1 — Scatter Diagram with Both Regression Lines Meeting at the Mean (x̄, ȳ) = (3, 4)
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Definition 7Regression Line of y on x

The line y−yˉ=byx(x−xˉ)y-\bar y = b_{yx}(x-\bar x), used to estimate yy for a given …

Definition 8Regression Line of x on y

The line x−xˉ=bxy(y−yˉ)x-\bar x = b_{xy}(y-\bar y), used to estimate xx for a given value of yy; both regression lines always intersect at the point of …