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I have data in the form given below, and I want to perform forecasting using multiple regression. I found definition of multiple regression from this link: http://otexts.com/fpp/5/1/ . I have these questions: (1) Can we forecast value of Y (the dependent variable) based on the given values of the independent variables (X1 and X2), as in below table? or it is mandatory to have previous values of Y along with X1 and X2 to forecast the future value of Y, (2) I want to forecast the value of Y at T8, by providing two inputs, i.e., value of Y_at_T8 = forecast(X1=22, X2=33), how to proceed on that? , (3) Is it mandatory for multiple regression that Time must be in fixed intervals, can it increase in varying intervals?

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(1) To construct the regression equation you must know the correspending values of y because of the nature of the problem. Otherwise you can't construct the regression equation.

(2) Without knowing y values you can't continue.

(3) The only restriction is that the errors have mean zero and uncorrelated with eachother. You can take any interval you want.

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  • $\begingroup$ Thank you. So Y must represent some subjective rating, or it can be the result of any fixed formula applied on X1 and X2. $\endgroup$ – Osman Khalid Mar 14 '13 at 22:46
  • $\begingroup$ @OsmanKhalid That's right. To be more rigid Y is the dependent variable in the system. $\endgroup$ – AnilB Mar 14 '13 at 23:13
  • $\begingroup$ Thank you, actually in some example data sets of multiple regression, I saw that Y was assigned values based on some subjective rating criteria, depending on values of independent variables (e.g., statsoft.com/textbook/multiple-regression). So I want to know that in the data sets, the value of Y is the result of formula applied on Xs (e.g., gpa calculation based on subject scores). OR, Y must be the subject rating. $\endgroup$ – Osman Khalid Mar 14 '13 at 23:43
  • $\begingroup$ As long as there is a relationship between Y and Xs it can be both. I can give more details. What is your background? $\endgroup$ – AnilB Mar 15 '13 at 0:23
  • $\begingroup$ My background is computer sciences and software development. It would be really kind of you, if you can provide more details, as I am very much new in forecasting, although I have understood simple linear regression techniques. $\endgroup$ – Osman Khalid Mar 15 '13 at 4:34

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