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Regression toward the mean
Regression toward the meanThe tendency that a random variable will ultimately have a value closer to its mean value. RELATED TERMS-------------------------------------- Variable A quantity that is liable to change; the adjective describing such a quantity. Will The written expression of a person's wishes as to how his property should be distributed by his executors. Value The worth or desirability of something expressed as an amount of money. Mean The expected value of a random variable. Arithmetic average of a sample. SIMILAR TERMS-------------------------------------- Regression A mathematical technique used to explain and-or predict. The general form is Y = a + bX + u, where Y is the variable that we are trying to predict; X is the variable that we are using to predict Y, a is the intercept; b is the slope, and u is the regression residual. The a and b are chosen in a way to minimize the squared sum of the residuals. The ability to fit or explain is measured by the R-square. Regression analysis A statistical technique that can be used to estimate relationships between variables. Regression coefficient Term yielded by regression analysis that indicates the sensitivity of the dependent variable to a particular independent variable. Regression equation An equation that describes the average relationship between a dependent variable and a set of explanatory variables. Regressive tax A tax system that provides that average tax rates decrease with increases in individuals' income brackets. Regressive taxation Makes poorer people pay a greater proportion of their income in tax than the rich. Regret theory A theory that says people anticipate regret if they make a wrong choice, and take this anticipation into consideration when making decisions. PREVIOUS AND NEXT TERMS-------------------------------------- Registration statement A legal document filed with the SEC to register securities for public offering that details the purpose of the proposed public offering. The statement outlines financial details, a history of the company's operations and management, and other facts of importance to potential buyers. Regression A mathematical technique used to explain and-or predict. The general form is Y = a + bX + u, where Y is the variable that we are trying to predict; X is the variable that we are using to predict Y, a is the intercept; b is the slope, and u is the regression residual. The a and b are chosen in a way to minimize the squared sum of the residuals. The ability to fit or explain is measured by the R-square. Regression analysis A statistical technique that can be used to estimate relationships between variables. Regression coefficient Term yielded by regression analysis that indicates the sensitivity of the dependent variable to a particular independent variable. Regression equation An equation that describes the average relationship between a dependent variable and a set of explanatory variables. Regression toward the mean Regressive tax A tax system that provides that average tax rates decrease with increases in individuals' income brackets. Regressive taxation Makes poorer people pay a greater proportion of their income in tax than the rich. Regret theory A theory that says people anticipate regret if they make a wrong choice, and take this anticipation into consideration when making decisions. Regular settlement Transaction in which a stock contract is settled and delivered on the fifth full business day following the date of the transaction (trade date). In Japan, regular settlement occurs three business days following the trade date; in London, two weeks following the trade date (at times, three weeks); in France, once per month. Regular way settlement In the money and bond markets, the standard basis on which some security trades are settled is that the delivery of the securities purchased is made against payment in Fed funds on the day following the transaction. We thank you for using the Financial Dictionary to search for Regression toward the mean. If you have a better definition for Regression toward the mean than the one presented here, please let us know by making use of the suggest a term option. This definition of Regression toward the mean may be disputed by other professionals. Our attempt is to provide easy definitions on Regression toward the mean and any other medical topic for the public at large.
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