Question

What does an R-Squared value indicate about a linear regression?

Answer 1

It indicates to what extent, the independent variable explains the dependent variable.

Explanation:

Suppose your dependent variable `y` is a social variable. It is affected by so many forces. `x`is one of the forces.

Now we shall have it like this.

`y` is affected by`x` and variables other than `x.`

In regression we collect data relating to `x` and `y.`

We want to know how far the variation in `y` is caused by`x` alone.

We calculate `R^2`. If its value is 0.74.

Our conclusion is that 74% variation in `y` is attributable to `x`.

It goes without saying the rest 26% change in `y` is caused by variables other than `x`.