Here we look at the most basic linear least squares regression. The main purpose is to provide an example of the basic commands. It is assumed that you know how to enter data or read data files which is covered in the first chapter, and it is assumed that you are familiar with the different data types.
We will examine the interest rate for four year car loans, and the data that we use comes from the U.S. Federal Reserve’s mean rates. We are looking at and plotting means. This, of course, is a very bad thing because it removes a lot of the variance and is misleading. The only reason that we are working with the data in this way is to provide an example of linear regression that does not use too many data points. Do not try this without a professional near you, and if a professional is not near you do not tell anybody you did this. They will laugh at you. People are mean, especially professionals.
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