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Casestudie Breakdown prediction Contell PILOT - Transumo

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5.4.2 The Major Problems of Regression<br />

Up to now, this section just introduced the approach of regression. The last part of<br />

this section will now review its two major problems: ([Eckey02], p. 179)<br />

• An incorrect chosen type of function leads to unacceptable results<br />

• Significant outliers influence the determination of a regression function<br />

The first problem can be solved partly by trying several types of functions.<br />

Afterwards, the best result can be selected. This is especially useful in cases of<br />

automated regression, where the general type of function may change. Problematic<br />

is the appliance of regression to purely random data, because a selection of a certain<br />

type of function might be impossible.<br />

The second problem could even be worse, because a correct type of function might<br />

lead to significant incorrect results, due to an influence of outliers. The two following<br />

figures exemplify this. Both, Figure 5-2 and Figure 5-3 contain a linear trend. But the<br />

obtained regression function for the first dataset is significantly wrong due to a single<br />

outlier.<br />

Figure 5-2: Incorrect Regression Function due to an Outlier ([Eckey02], p. 180) (adapted)<br />

Figure 5-3: Correct Regression Function ([Eckey02], p.180) (adapted)<br />

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