What is the primary purpose of regression analysis?

The primary purpose of regression analysis is to model relationships between variables and make predictions. This statistical method enables analysts to understand how the dependent variable changes when one or more independent variables are varied. By establishing these relationships, regression analysis allows for the forecast of future outcomes based on historical data.

For instance, if a company wants to predict sales based on advertising expenditure, regression analysis can be employed to create a mathematical model that describes this relationship. The insights gained can be invaluable for making informed decisions, such as how much to invest in advertising to achieve desired sales targets.

In a broader context, regression analysis serves as a fundamental tool in various fields such as economics, biology, and engineering, where understanding the dynamics between different variables is crucial for effective analysis, planning, and strategy development.