If your data are set up with the Y variable between two columns of X variables Excel will not allow you to use click and drag. Excel has one odd quirk and that is the click and drop feature requires that the independent variables, the X variables, are all together, meaning that they form a single matrix. Clicking the box next to the Y and X ranges will allow you to use the click and drag feature of Excel to select your input ranges.

Congratulations, you have made it to the regression window. These steps are presented in the following screen shots.Ĭlick “Data” then “Data Analysis” and then click “Regression” and “OK”. Now there should be an Analysis tab under the data menu. This will open a new window where you click “Analysis ToolPak” (make sure there is a green check mark in the box) and then click “OK”. Select “Analysis ToolPak” and click “GO” next to “Manage: excel add-ins” near the bottom of the window. To activate the Analysis ToolPak follow these steps:Ĭlick “File” > “Options” > “Add-ins” to bring up a menu of the add-in “ToolPaks”. The program calls upon a significant amount of space so is not loaded automatically. If you have Excel you have the Analysis ToolPak although you may not have it activated. The first step to doing a regression using Excel is to load the program into your computer. The goal of this section is to demonstrate how to use Excel to run a regression and then to do so with an example of a simple version of a demand curve. Even more advanced packages exist, but typically require the analyst to do some significant amount of programing to conduct their analysis. Stata is an alternative and has features that will be important for more advanced econometrics study if you choose to follow this path. We have chosen Microsoft Excel because of the wide-spread availability both on college campuses and in the post-college market place. With the advent of the personal computer and the explosion of a vital software market we have a number of regression and statistical analysis packages to choose from. There was no market for something called “software” and certainly nothing called “apps”, an entrant into the market only a few years old. In the early days programs were developed by the researchers and shared. Even then the computational ability of even the largest IBM machines is laughable by today’s standards. Indeed, the use of regression analysis was almost non- existent before the middle of the last century and did not really become a widely used tool until perhaps the late 1960’s and early 1970’s. This section of this chapter is here in recognition that what we are now asking requires much more than a quick calculation of a ratio or a square root. Linear Regression and Correlation 74 How to Use Microsoft Excel® for Regression Analysis

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