\[ Y_i = \beta_0 + \beta_1 X_i + \varepsilon_i \]
💬 Read it in plain English:
Each observation's outcome (Yi) equals a starting baseline when the predictor is zero (β0), plus the slope (β1) multiplied by that row's predictor value (Xi), plus unexplained individual noise (εi).
Yi
The continuous metric you want to explain or predict for observation i (e.g., Weekly Revenue).
Xi
The value of your marketing input or group indicator for observation i.
β0
Expected value of Y when predictor X equals zero (or the reference group mean for a 0/1 indicator).
β1
Expected change in Y for a 1-unit increase in X.
εi
Unexplained gap between the actual outcome and the fitted regression line for row i.
\[ t = \frac{\hat{\beta}_1}{\mathrm{SE}(\hat{\beta}_1)} \quad (\nu = n - 2), \qquad \mathrm{CI}_{1-\alpha} = \hat{\beta}_1 \pm t_{\alpha/2,\,\nu}\,\mathrm{SE}(\hat{\beta}_1) \]
💬 Read it in plain English:
The t-statistic divides your estimated slope by its sampling uncertainty; if the signal is large relative to the noise, the confidence interval excludes zero and confirms a real linear relationship.
t, tα/2,ν
Signal-to-noise ratio of the estimated slope (t) and the two-tailed critical multiplier (tα/2,ν) for significance level α.
SE(β̂1)
Precision of the estimated slope β̂1; shrinks with larger sample size n and wider spread in X.
ν, n
Sample size n and degrees of freedom ν = n − 2 remaining after estimating the intercept and slope.