Regression Line  R 2 represents the fraction of variation in the data (regression line)

1-2 Statistics: The equation for the Pearson product moment correlation coefficient, r, is

Quantitative Methods: Causal Models Table 1: Franchise Population (000)Sales ($000)  Sales = x Population  R 2 represents the fraction of variation in the data (regression line)  If R 2 = 1  data fits perfectly, here R 2 =  good  Predicted Sales (95) = x 95 = not 610 ( )  Predicted Sales (76) = x 76 = not 240 ( )  Predicted Sales (14) = x 14 = not 210 ( )

Unexplainable part always left – the random component Understand the process that causes demand