From the course: 11 Useful Tips for Regression Analysis

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Standardized estimates

Standardized estimates

From the course: 11 Useful Tips for Regression Analysis

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Standardized estimates

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- [Instructor] Here is a standard regression output table. Several explanatory variables trying to explain how car prices are determined. We see that two variables are statistically significant. One has an effect of plus four, and one has an effect of minus 108. But which variable matters the most? Well, we might think it's length. It is statistically significant after all, and has the highest absolute value. If we ignore statistical significance, we might assume the variable headroom is most important. It has an estimate of minus 710, and therefore, it is the most important variable. But both answers are incorrect. A key issue with comparing raw coefficients across a regression model is that variables are measured differently. Miles per gallon is measured in miles per gallon, headroom in inches, trunk space in feet, weight in pounds, and length in inches. Even when they have the same…

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