STA 220 Lecture 6: Lecture 6: Chapter 7
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Sta 220 - lecture 6 - chapter 7. Some points will be above the line and some points will be below. The estimate made from the model is the predicted value. The difference between the observed value and its associated predicted value is called the residual. Residual = observed - predicted = y - . A negative residual means the predicted value is too large. A positive residual means the predicted value is too small. Some residuals are positive and others are negative on average, cancel each other out. Can"t assess how well a line fits by adding up all the residuals. Have to square the residuals and add the squares. The smaller the sum, the better the fit. The line of best fit is the line for which the sum of the squared residuals is the smallest. In algebra, a straight line can be written as: In statistics, a slightly different notation is used:
