What does an R-Squared value indicate about a linear regression?

1 Answer
Nov 1, 2015

It indicates to what extent, the independent variable explains the dependent variable.

Explanation:

Suppose your dependent variable y is a social variable. It is affected by so many forces. xis one of the forces.

Now we shall have it like this.

y is affected byx and variables other than x.

In regression we collect data relating to x and y.

We want to know how far the variation in y is caused byx alone.

We calculate R2. If its value is 0.74.

Our conclusion is that 74% variation in y is attributable to x.

It goes without saying the rest 26% change in y is caused by variables other than x.