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Exercise

Estimating simple linear regression

Back to our sales dataset, salesData, which is already loaded in the workspace. We saw that the sales in the last three months are strongly positively correlated with the sales in this month. Hence we will start off including that as an explanatory variable in a linear regression.

Instructions
100 XP

  • Use the lm() function in order to specify the linear regression model described above. Assign it to an object salesSimpleModel.

  • Then use the summary() function in order to look at the results.

  • Look at the regression coefficient. Is there a positive or negative relationship between the two variables?

  • About how much of the variation in the sales in this month can be explained by the sales of the previous three months?