What is a residual? When is a residual negative?
Question
What is a residual? When is a residual negative?
Solution
A residual, in the context of statistics and regression analysis, is the difference between the observed value of a dependent variable and the value that is predicted by the regression model. It's essentially the error of the prediction.
A residual is calculated as:
Residual = Observed value - Predicted value
A residual is negative when the predicted value is greater than the observed value. This means that the model overestimated the value of the dependent variable.
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