yego.me
💡 Stop wasting time. Read Youtube instead of watch. Download Chrome Extension

Interpreting y-intercept in regression model | AP Statistics | Khan Academy


2m read
·Nov 11, 2024

Adriana gathered data on different schools' winning percentages and the average yearly salary of their head coaches in millions of dollars in the years 2000 to 2011. She then created the following scatter plot and trend line.

So this is salary in millions of dollars in the winning percentage. Here we have a coach who made over $4 million, and it looks like they won over 80% of their games. But then you have this coach over here who has a salary of a little over $1.5 million, and they are winning over 85%.

Each of these data points is a coach, and it's plotting their salary or their winning percentage against their salary. Assuming the line correctly shows the trend in the data, and it's a bit of an assumption, there are some outliers here that are well away from the model.

It looks like there's a positive linear correlation here, but it's not super tight. There are a bunch of coaches right over here in the lower salary area, going all the way from 20-something percent to over 60%.

Assuming the line correctly shows the trend in the data, what does it mean that the line's Y-intercept is 39? Well, if you believe the model, then a Y-intercept of being 39 would suggest that if someone makes no money, the model would expect them to win 39% of their games, which seems a little unrealistic because you would expect most coaches to get paid something.

But anyway, let's see which of these choices actually describe that. So let me look at the choices:

  1. The average salary was $39 million. No, no one on our chart made 39 million on average.
  2. Each million dollar increase in salary was associated with a 39% increase in winning percentage. Now that would be something related to the slope, and the slope was definitely not 39.
  3. The average winning percentage was 39%. No, that wasn't the case either.
  4. The model indicates that teams with coaches who had a salary of $0 million will average a winning percentage of approximately 39%.

Yeah, this is the closest statement to what we just said. If you believe that model—and that's a big if—if you believe this model, then this model says someone making $0 will get 39%.

This is frankly why you have to be skeptical of models; they're not going to be perfect, especially at extreme cases oftentimes. But who knows?

Anyway, hopefully, you found that useful.

More Articles

View All
Bill Ackman on Starting His Own Hedge Fund at 26 and Activist Investing
To put this in context, you were mid-20s and I had just gotten—I just started as a rookie professor two years before. So, Bill, at the time, was trying to set up an interesting business, which ultimately became Gotham Partners. So, for those of you who ar…
New Crew, Same Pissah | Wicked Tuna
Chum and they will come with Lance. Brad and I, we are gonna catch a ton of tuna fish this year. Drop you like a bad habit. I’ve known Paul for about two and a half years. He’s a great guy; he’s a great fisherman. The reason why I’m fishing is to provide …
Welcome to Alux - Channel Trailer
[Music] Welcome to Alux, the place where future billionaires come to get inspired. We create beautiful content that alters the future of our viewers for real. Okay, we take complicated topics like building wealth, escaping poverty, finding happiness, and …
From Homeless To Owning A Bugatti | TheStradman
I decided to live in my Audi TT in Beverly Hills, California. I would just stand there on Rodeo Drive for eight to twelve hours a day, just hoping to see cool cars. Every evening, I would park outside McDonald’s, edit my videos, use their free Wi-Fi, post…
It Started: The Upcoming Housing Collapse - Round 2
What’s up, Graham? It’s guys here. So, we got to talk about the housing market because after two years of non-stop bidding wars, price increases, and low inventory, believe it or not, asking prices have begun to fall. Except for Betty White’s house, which…
Building Shelter | How to Survive on Mars
When we get to Mars, we need to solve our basic needs, in particular protection from radiation. The first crew that lands on Mars will live in their ship, but you can’t live there very long. The cosmic radiation and the solar radiation is going to penetra…