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2.7 A SERVICE INDUSTRY APPLICATION OF REGRESSION

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A hospital is implementing a program to improve service quality and productivity. As part of this program the hospital management is attempting to measure and evaluate patient satisfaction. Table B.17 contains some of the data that have been collected on a random sample of 25 recently discharged patients. The response variable is satisfaction, a subjective response measure on an increasing scale. The potential regressor variables are patient age, severity (an index measuring the severity of the patient’s illness), an indicator of whether the patient is a surgical or medical patient (0 = surgical, 1 = medical), and an index measuring the patient’s anxiety level. We start by building a simple linear regression model relating the response variable satisfaction to severity.

Figure 2.6 is a scatter diagram of satisfaction versus severity. There is a relatively mild indication of a potential linear relationship between these two variables. The output from JMP for fitting a simple linear regression model to these data is shown in Figure 2.7. JMP is an SAS product that is a menu-based PC statistics package with an extensive array of regression modeling and analysis capabilities.

At the top of the JMP output is the scatter plot of the satisfaction and severity data, along with the fitted regression line. The straight line fit looks reasonable although there is considerable variability in the observations around the regression line. The second plot is a graph of the actual satisfaction response versus the predicted response. If the model were a perfect fit to the data all of the points in this plot would lie exactly along the 45-degree line. Clearly, this model does not provide a perfect fit. Also, notice that while the regressor variable is significant (the ANOVA F statistic is 17.1114 with a P value that is less than 0.0004), the coefficient of determination R2 = 0.43. That is, the model only accounts for about 43% of the variability in the data. It can be shown by the methods discussed in Chapter 4 that there are no fundamental problems with the underlying assumptions or measures of model adequacy, other than the rather low value of R2.


Figure 2.6 Scatter diagram of satisfaction versus severity.


Figure 2.7 JMP output for the simple linear regression model for the patient satisfaction data.

Low values for R2 occur occasionally in practice. The model is significant, there are no obvious problems with assumptions or other indications of model inadequacy, but the proportion of variability explained by the model is low. Now this is not an entirely disastrous situation. There are many situations where explaining 30 to 40% of the variability in y with a single predictor provides information of considerable value to the analyst. Sometimes, a low value of R2 results from having a lot of variability in the measurements of the response due to perhaps the type of measuring instrument being used, or the skill of the person making the measurements. Here the variability in the response probably arises because the response is an expression of opinion, which can be very subjective. Also, the measurements are taken on human patients, and there can be considerably variability both within people and between people. Sometimes, a low value of R2 is a result of a poorly specified model. In these cases the model can often be improved by the addition of one or more predictor or regressor variables. We see in Chapter 3 that the addition of another regressor results in considerable improvement of this model.

Introduction to Linear Regression Analysis

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