What makes it linear regression

1
What makes it linear regression?

• Model is linear in parameters
• Parameters cant occur inside a nonlinear
  function
• Residuals are additive

• Nonlinearity in variables is OK

2
Dummy variables

• How can we handle categorical explanatory
  (independent) variables in a regression?
• Dichotomous
• Male/Female
• Pre-regulation/Post-regulation
• Island/Mainland
• Polytomous
• Continent
• Political party
• Soil type

• Answer make a dummy!

3
Alien Species

• Exotic species cause economic and ecological
  damage
• Not all countries equally invaded
• Want to understand characteristics of country
  that make it more likely to be invaded.

• Well measure invasiveness as fraction of
  species that are Alien
• Two hypotheses
• Human population density plays a role in a
  countrys invasiveness.
• Island nations are more invaded than mainland
  nations.

4
Island
Mainland
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A Simple Model

• ISL is a Dummy variable, coded 0 if mainland, 1
  if island
• Dummy changes intercept (explain).
• Interaction dummy variable?
• E.g. Invasions of island nations more strongly
  affected by population density.

6
A model with interactions
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What about a polytomous variable (e.g.,
Continent)?
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