Circulation: Use Regression Analysis to Optimize Catalog Circ and Sales Data

¥ The standard error of coefficient shows how close the prediction will be.

¥ The T-statistic tells you if the error is large or small. Any number greater than 2 is a good indication of a reliable predictor.

Back to our regression analysis of the discount coupons offered over the course of a year: R-squared on the East Coast is greater than 0.7, so we can assume there’s a good relationship between discounts and new sales. The West Coast comes in at less than 0.7, so we know there’s no correlation; for whatever reason, discounts offered have less impact on generating new sales.