regression

noun re·gres·sion \ ri-ˈgre-shən \
Updated on: 22 Nov 2017

Definition of regression

1 : the act or an instance of regressing
2 : a trend or shift toward a lower or less perfect state: such as
a : progressive decline of a manifestation of disease
b (1) : gradual loss of differentiation and function by a body part especially as a physiological change accompanying aging
(2) : gradual loss of memories and acquired skills
c : reversion to an earlier mental or behavioral level
d : a functional relationship between two or more correlated variables that is often empirically determined from data and is used especially to predict values of one variable when given values of the others
  • the regression of y on x is linear
; specifically : a function that yields the mean value of a random variable under the condition that one or more independent variables have specified values
3 : retrograde motion

Examples of regression in a Sentence

  1. the regression to really childish behavior that boys often undergo when put in large groups

Recent Examples of regression from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'regression.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of regression

1583


Financial Definition of REGRESSION

regression

What It Is

Regression is a statistical method used in finance and other fields to make predictions based on observed values. It is a measure of how correlated a group of actual observations are to a model’s predictions.

How It Works

In the following examples, the blue dots represent the going prices for figurine collections on eBay. Collections with more figurines go for as much as $100; collections with fewer than five figurines sell for very little. How can we predict how much a collection will sell for?

We do it using regression analysis, which essentially finds the formula for the line that most closely fits the observations. That way, we can use the line to predict what the price of the collection might be if we know how many figurines are in a collection, or we can predict how many figurines should be in a collection if we know the asking price.

In our example below, the black lines represent a regression line, which is represented by the formula in the top right-hand corner of each chart. This formula is what analysts also use to predict future values of securities based on the behavior of the actual observations.

Goodness of fit is a component of regression analysis. The term refers to how far apart the expected values of a financial model are from the actual values (that is, how predictive the line is).

As you can see, this regression line has a high goodness of fit; the formula for the regression line comes up with the observed values about 79% of the time.

This next chart is an example of a regression line with low goodness of fit. Here, the values are all over the place, and the formula for the regression line was virtually unable to predict anything.

Why It Matters

Regression is a mathematical version of a crystal ball, but a very cracked, blurry crystal ball. Goodness of fit is the key -- it's a confidence measure. This is because when you've come up with a formula that accounts for most of the variations in a group of, say, price observations, you've also come up with a formula that can be a very reliable predictor of what prices will be in the future. And that’s priceless.


Medical Dictionary

regression

noun re·gres·sion \ ri-ˈgresh-ən \

medical Definition of regression

: a trend or shift toward a lower, less severe, or less perfect state: as
a : progressive decline (as in size or severity) of a manifestation of disease
  • tumor regression following radiation
b (1) : a gradual loss of differentiation and function by a body part especially as a physiological change accompanying aging
  • menopausal regression of the ovaries
(2) : gradual loss (as in old age) of memories and acquired skills
c : reversion to an earlier mental or behavioral level or to an earlier stage of psychosexual development in response to organismic stress or to suggestion
  • a protective regression towards childhood
  • —Havelock Ellis


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