Methods of Correlation and Regression Analysis, Linear and Curvilinear

By Mordecai Ezekiel; Karl A. Fox | Go to book overview

SECTION IV
Multiple Curvilinear Regressions

CHAPTER 14
Determining multiple curvilinear regressions by algebraic and graphic methods

The discussion of multiple regression to this point has been limited to linear relationships--where the change in the dependent variable accompanying unit changes in each independent variable was assumed to be of exactly the same amount, no matter how large or how small the independent variable became. Thus in the farm income example, it was assumed that each additional cow would be accompanied by the same increase in income, no matter whether it was the first, the tenth, or the thirtieth. Similarly, each additional acre in crops or each additional man employed was assumed to be accompanied by an identical contribution to the income, no matter how large or how small the business already was. It is quite evident that such an analysis makes no provision for there being an otpimum size of operation for given circumstances; in this particular case, it assumes that there is no such thing as the principle of diminishing returns. Such an analysis might therefore fail entirely to reveal the proper size of productive unit, or the number of each of the several elements to be employed to yield maximum returns.

In many other types of problems for which multiple regression analysis might be used, limitation of the analysis to linear relations would seriously restrict its value or prevent its use altogether. In dealing with the effect of weather upon crop yields, several variable weather factors are usually concerned. There may be an optimum point for growth, with respect

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