02-18-2015 09:34 AM
An error term exists in the model. It is a mathematical construct.
The residual is the actual value of one data point (deviation from the value predicted by the model).
02-18-2015 01:08 PM
The residual, , is the difference between the value of the dependent variable predicted by the model, , and the true value of the dependent variable, .
02-18-2015 01:24 PM
I would recommend reading some good introductory regression and linear modeling texts. You may find this one to be helpful:
Regression Modeling Strategies: With Applications to Linear Models, Logistic Regression, and Survival Analysis, by Frank Harrell, Jr.