in my experience on typically wants to determine correlation via a regression an

Question

in my experience on typically wants to determine correlation via a regression analysis because by having a strong correlation it helps one predict what will occur. Let me try another example (I am making this up). River flow and electricity generation at a dam. Suppose a flow of 1 million gallons produces 1 million kilowatts of electricity. A flow of 10,000 gallons produces 10,000 kilowatts. The r squared would be 1, a perfect straight line. Therefore, we could predict electricity generation based on other potential gallons of water flow up and down. 0 equals 0, or 100,000 equals 100,000 as so forth! Class, what other circumstances might this power of prediction be useful?

Explanation / Answer

There are numerous examples where the power of prediction is useful. I cite a few of them below:

1. Predicting sales figures based on advertising expenses (e.g., an advertisement expense of X value leads to increase in salesfigure by Y units).

2. Predicting marks scored in an examination based on the number of hours studied.

3. Predicting average birth rate depending on income levels.

4. Predicting crop yields based on the amount of rainfall.

5. Predicting chances of admission based on SAT score.

and so on...

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