Question

Imagine that you have plotted many data points on an xy-plane. Your points seem to align into a clear best-fit line. Do you think this best-fit line can help you make predictions about future data? Explain your answer, and give one or more examples to support it.

Answer 1

It depends really. If you stay close to the present, then predicting future results isn't too bad. The further you go out, the more unpredictable things get. This is because the points may deviate from the line of best fit (aka regression line) as time wears on. Of course, it also depends on what kind of data we're working with. Some pairs of variables are naturally going to correlate very strongly together. An example would be temperature versus ice cream sales.