Chapter 7: Discriminant Analysis

Regression Analysis can be used to predict the values of a dependent variable based on a set of independent variables. Here, the dependent and independent variables consist of interval or proportional data. In regression, the independent variables must be normally distributed with equal variance. For this, the residual values should be examined to see if these assumptions are met.

Regression Analysis should not be used to examine whether people find life exciting, routine or boring based on variables such as education, age, income, and working hours per week. Because the dependent variable is ordinal. For this purpose, discriminant analysis can be used. Discriminant analysis is used to estimate group membership. One of the first applications of discriminant analysis was to evaluate the decision to grant credit to customers in business life.