# Linear Regression for Continuous Target Variables

Linear regression is a classic and widely used technique in statistics and machine learning for analyzing the relationship between a dependent variable and one or more independent variables. It is especially useful when the target variable is continuous, meaning it can take any numerical value within a given range.

## Understanding Linear Regression

Linear regression aims to find the best-fitting linear relationship between the independent variables (features) and the dependent variable (target). It assumes that there is a linear relationship between the features and the target variable. The goal is to find the equation of a straight line that can predict the target variable accurately.

The equation of a linear regression model can be represented as:

`y = b0 + b1*x1 + b2*x2 + ... + bn*xn`

where:

• `y` is the target variable.
• `x1, x2, ..., xn` are the independent variables.
• `b0, b1, b2, ..., bn` are the coefficients to be estimated.

The values of the coefficients (`b0, b1, b2, ..., bn`) are estimated using a method called Ordinary Least Squares (OLS). OLS minimizes the sum of the squared differences between the predicted and actual target values.

## Example Use Case

Let's consider an example to understand linear regression for continuous target variables. Suppose we want to predict the house prices based on various features such as the number of rooms, the size of the house, and the location. In this case, the house price (continuous variable) is the target variable, and the number of rooms, size, and location are the independent variables.

To fit a linear regression model, we collect a dataset that includes the target variable (house prices) and the corresponding features. We divide the data into two parts: a training set and a test set. The training set is used to train the model by estimating the coefficients (`b0, b1, b2, ..., bn`), while the test set is used to evaluate the model's performance.

Once the model is trained, we can use it to make predictions on new, unseen data. For example, given a house with features such as 3 rooms, 1500 square feet, and located in a prime neighborhood, the model can estimate the expected price.

## Evaluating the Model

To evaluate the performance of the linear regression model, several metrics can be used. One commonly used metric is the Mean Squared Error (MSE), which measures the average squared difference between the predicted and actual target values in the test set. The lower the MSE, the better the model's performance.

Other evaluation metrics include the Root Mean Squared Error (RMSE), Mean Absolute Error (MAE), and the coefficient of determination (R-squared). These metrics provide additional insights into the model's accuracy and explainability.

## Conclusion

Linear regression is a powerful technique for predicting continuous target variables based on independent features. By fitting a linear relationship between the target and features, we can estimate the coefficients and make accurate predictions. This regression model can be applied in various domains, ranging from finance and economics to healthcare and marketing.

In Python, there are several libraries, such as scikit-learn and statsmodels, that provide functions and classes to conveniently implement linear regression. By gaining a solid understanding of linear regression and its underlying concepts, you can leverage its capabilities to solve real-world problems effectively.