When is it appropriate to use linear regression according to rules of thumb?

Using linear regression is most appropriate when a trend is apparent in the data. This method seeks to identify relationships between variables, allowing for the prediction of one variable based on the value of another. For linear regression to be effective, there should be a clear linear relationship among the variables being analyzed, which typically manifests as a visible trend in a scatterplot of the data points.

When a trend is evident, the linear model can summarize the relationship effectively, making it a useful tool for analysis and prediction within the identified framework. In cases where the relationship is unclear or non-linear, applying linear regression may not yield meaningful insights or accurate predictions.

While precise predictions and analysis are valuable goals, the usefulness of linear regression hinges primarily on the presence of a discernible trend. Similarly, the presence of outliers can distort the results of a linear regression, making predictions less reliable. Linear regression generally does not serve well for qualitative analysis, which involves categorical data rather than continuous measurements typically modeled with regression techniques.