Predicting insurance charges using linear regression models

Abstract

Abstract. Linear regression method can be performed to predict the outcome from one or many input values. Its versatility allows it to be applied on many datasets that contain correlated values. However, researches on the application of linear regression on medical insurance costs, a highly important part of peoples life, are few. This paper studies an insurance dataset from Kaggle by applying linear regression on it. The author validates the dataset at first and explores the correlation between each individual factor and their corresponding charges to better show how insurance costs differ from person to person with different background. Many figures are also included to help visualize the correlation between factors. In the end, the author creates a multilinear regression model to predict the insurance charges. The R-Squared score of the model and a result table including regression coeffects are also provided to show the accuracy and details of the model.