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    Least Square Method

    Uploaded by

    Ayaz Sultan
    The least squares method fits an algebraic equation to data points by minimizing the sum of the squares of the residuals. It can be used for linear or nonlinear equations depending on the pattern of the data. For a linear fit, the normal equations are derived from taking the sum of Y, XY, and X^2. This allows calculating the slope and y-intercept to generate the linear prediction equation. For a quadratic fit, additional normal equations are derived involving X^2Y, X^3, and X^4 to calculate the coefficients for the quadratic and linear terms to predict y values. Examples are provided to demonstrate fitting linear and quadratic equations to time series data using the least squares method.

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    © All Rights Reserved
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    Least Square Method

    Uploaded by

    Ayaz Sultan
    130 views4 pages
    The least squares method fits an algebraic equation to data points by minimizing the sum of the squares of the residuals. It can be used for linear or nonlinear equations depending on the pattern of the data. For a linear fit, the normal equations are derived from taking the sum of Y, XY, and X^2. This allows calculating the slope and y-intercept to generate the linear prediction equation. For a quadratic fit, additional normal equations are derived involving X^2Y, X^3, and X^4 to calculate the coefficients for the quadratic and linear terms to predict y values. Examples are provided to demonstrate fitting linear and quadratic equations to time series data using the least squares method.

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    Least Square Method (1)

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    The least squares method fits an algebraic equation to data points by minimizing the sum of the squares of the residuals. It can be used for linear or nonlinear equations depending on the pattern of the data. For a linear fit, the normal equations are derived from taking the sum of Y, XY, and X^2. This allows calculating the slope and y-intercept to generate the linear prediction equation. For a quadratic fit, additional normal equations are derived involving X^2Y, X^3, and X^4 to calculate the coefficients for the quadratic and linear terms to predict y values. Examples are provided to demonstrate fitting linear and quadratic equations to time series data using the least squares method.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    130 views4 pages

    Least Square Method

    Uploaded by

    Ayaz Sultan
    The least squares method fits an algebraic equation to data points by minimizing the sum of the squares of the residuals. It can be used for linear or nonlinear equations depending on the pattern of the data. For a linear fit, the normal equations are derived from taking the sum of Y, XY, and X^2. This allows calculating the slope and y-intercept to generate the linear prediction equation. For a quadratic fit, additional normal equations are derived involving X^2Y, X^3, and X^4 to calculate the coefficients for the quadratic and linear terms to predict y values. Examples are provided to demonstrate fitting linear and quadratic equations to time series data using the least squares method.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    LEAST SQUARE METHOD

    In this method, an algebraic equation is fitted to the given data points. This equation may be
    Linear or Non-Linear depends upon the pattern of time series graph.

    NOTE: If we are using Linear Equation, then we say that Linear Fitted Least-Square Method
    and if we are using the Quadratic Equation then we say that Quadratic Fitted Least-Square
    Method.

    Linear Fitted Least - Square Method

    Ŷ = a + b X --------------- (1)

    Where The Normal Equations of (1) are given below

    ∑Y = na + b ∑X
    and ∑XY = a ∑X + b ∑X2

    EXP: For the given data: (For Odd Observed Points)

    Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
    Price 7.5 7.8 8.2 8.2 8.4 8.5 8.7 9.1 9.3 9.7 9.9

    Find a least Square (Linear Fitted) Method to compute the trends values and also find them.

    Solution

    YEAR PRICES (Y) X XY X2 Ŷ


    2001 7.5 -5 -37.5 25 7.56
    2002 7.8 -4 -31.2 16 7.78
    2003 8.2 -3 -24.6 9 8.00
    2004 8.2 -2 -16.4 4 8.22
    2005 8.4 -1 -8.4 1 8.44
    2006 8.5 0 0 0 8.66
    2007 8.7 1 8.7 1 8.88
    2008 9.1 2 18.2 4 9.1
    2009 9.3 3 27.9 9 9.32
    2010 9.7 4 38.8 16 9.54
    2011 9.9 5 49.5 25 9.76
    ∑Y = 95.3 ∑X = 0 ∑XY = 25 ∑X = 110
    2
    Linear Fitted Least Square Method

    Ŷ = a + b X --------------- (1)

    ∑Y = na + b ∑X ---------------- (a)
    and ∑XY = a ∑X + b ∑X2 --------- (b)

    (a) implies that, 95.3 = 11a + b(0)


    => 95.3 = 11a
    => a = 95.3/11 = 8.66

    (b) implies that, 25 = 8.66(0) + b (110)


    => 25 = 0 + 110b
    => b = 25/110 = 0.22

    (1) implies that

    Ŷ = 8.66 + 0.22 X ------------------- (2)


    (1) Put X = -5
    Ŷ = 8.66 + 0.22 (-5) = 7.56

    EXP: For the given data: (For Even observed Points)

    Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
    Price 7.5 7.8 8.2 8.2 8.4 8.5 8.7 9.1 9.3 9.7

    Find a least Square (Linear Fitted) Method to compute the trends values and also find them.

    Solution

    YEAR PRICES (Y) X XY X2 Ŷ


    2001 7.5 -9
    2002 7.8 -7
    2003 8.2 -5
    2004 8.2 -3
    2005 8.4 -1
    2006 8.5 +1
    2007 8.7 +3
    2008 9.1 +5
    2009 9.3 +7
    2010 9.7 +9
    ∑Y = ∑X = 0 ∑XY = ∑X2 =
    Quadratic Fitted Least-Square Method

    Ŷ = a + b X + c X2 ----------------- (1)

    Where Normal Equations of (1) are

    ∑Y = na + b∑X + c∑X2
    ∑XY = a∑X + b∑X2 + c ∑X3
    ∑X2Y = a∑X2 + b∑X3 + c∑X4

    EXP: Fit a Second degree (Quadratic) Fitted Least-Square Method (Curve) for the given data:

    YEAR 2001 2002 2003 2004 2005


    VALUES 13 24 39 65 106

    Solution

    YEAR Y X XY X2Y X2 X3 X4
    2001 13 -2 -26 52 4 -8 16
    2002 24 -1 -24 24 1 -1 1
    2003 39 0 0 0 0 0 0
    2004 65 +1 65 65 1 +1 1
    2005 106 +2 212 424 4 +8 16
    ∑Y= 247 ∑X = 0 ∑XY=227 ∑X2Y=565 ∑X2=10 ∑X3 = 0 ∑X4=34

    Ŷ = a + b X + c X2 ----------------- (1)

    Where Normal Equations of (1) are

    ∑Y = na + b∑X + c∑X2 --------- (a)


    ∑XY = a∑X + b∑X2 + c ∑X3 ----------- (b)
    ∑X2Y = a∑X2 + b∑X3 + c∑X4 -------------- (c)

    (a) implies that, 247 = 5a + b(0) + c(10) => 247 = 5a + 10c -------- (*)
    (b) implies that, 227 = a(0) + b(10) + c(0) => 227 = 10b => b = 227/10 = 22.7
    (c) implies that, 565 = a(10) + 22.7(0) + c(34) => 565 = 10a + 34c ------- (**)

    Now we have two equations


    247 = 5a + 10c ------ (*)
    565 = 10a + 34c --------- (**)

    a = 393 and c = 5.07


    => Ŷ = 393 + 22.7 X + 5.07 X2

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