Philosophic Method, SAIL Fall 2022

  • Nature of Philosophy
    • Subject Matter: Any Fundamental Issue
    • Method: Analysis of Arguments
    • Mindset: Skepticism
  • Examples of Arguments
    • President John Oliver
    • Black Swans
    • Editorial on Capital Punishment
    • Declaration of Independence
  • Applied Philosophy
    • Application of philosophic analysis to matters of practical concern, e.g. issues in politics, law, medicine, religion, environment, economics, education, science, and technology.
    • Philosophical analysis is applied to:
      • Arguments
      • Claims
      • Decisions
      • Investigations

Tools for Evaluating Regressions

Statisticians have developed various kinds of tools for evaluating regressions.

Graphics
Correlation
  • Variables are correlated to the extent that they vary together, in the same or opposite directions.
  • Correlation coefficients are useful
    • between an independent variable and the dependent variable
    • among independent variables
  • The Correlation Matrix for multiple regression displays all the correlation coefficients between variables, independent and dependent.
  • View Correlation
Prediction
  • An hypothesis is supported or disproved by its predictions. A regression equation is an hypothesis. So a natural way of evaluating a regression is to assess its predictions for “out-of-sample” data.
  • An interesting metric, the Prediction Sum of Squares (PRESS), evaluates a regression by seeing how well regressions on the sample data, minus one datapoint, predict the missing data item.
Residual Metrics
  • A residual is the difference, at a given datapoint, between the values of the observed and predicted dependent variable. There are different ways of combing the residuals into a single statistic.
Sum-of-Squares Metrics
Standard Error Metrics
Likelihood Metrics
  • A hypothesis is more likely if it better predicts the data than competing hypotheses, other things being equal. 
  • Regression likelihood metrics are based on the idea that the more likely the data given the regression equation, the better the regression.
  • View Likelihood Metrics
Linear Regression on IMF

The regression stats are:

  • Regression Equation; y = 74.6433 –71.4322 m
  • DataPoints = 167
  • NbrofIVs = 1
  • Sum of Squares Equation: 2369.03 + 7307.92 = 9676.95
    • SSR + SSE = SST, where SSR, SSE, and SST are the sums of squares for
      • predicted y’s
      • residuals
      • observed y’s
  • Standard Error of the Regression = 6.6551
    • = √(SSE / (Datapoints – (NbrofIVs + 1)))
  • R-Squared = 0.244811
    • = SSR / SST
  • Adjusted R-Squared = 0.240234
  • AICc = 1111.13
  • The regression on IMF is not as good the regression on GDP
    • SER is higher, 6.6551 versus 5.18411.
    • R-Squared is lower, 0.244811 versus 0.541759
    • AICc is higher, 1111.13 versus 1027.7
NonLinear Regression on GDP

The regression stats:

  • Regression Equation; y = 12.8393 + 5.86683 Log[$]
  • DataPoints = 167
  • NbrofIVs = 1
  • Sum of Squares Equation: 6599.56 + 3077.39 = 9676.95
    • SSR + SSE = SST, where SSR, SSE, and SST are the sums of squares for
      • predicted y’s
      • residuals
      • observed y’s
  • Standard Error of the Regression = 4.31866
    • = √(SSE / (Datapoints – (NbrofIVs + 1)))
  • R-Squared = 0.681988
    • = SSR / SST
  • Adjusted R-Squared = 0.68006
  • AICc = 966.696
  • As you can tell from the scatter plot, this nonlinear regression on GDP is better than its linear counterpart
    • SER is lower, 4.31866 versus 5.18411.
    • R-Squared is higher, 0.681988 versus 0.541759
    • AICc is lower, 966.696 versus 1027.7
  • Incidentally, although the regression is nonlinear, R-Squared is valid since SSR and SSE add up to SST. I did my own calculation, since Mathematica calculates nonlinear R-Squareds differently, getting a much higher number, in this case 0.996545.