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02-18-2015 05:34 AM

What is the difference between error term and residuals in modeling?

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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).

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02-18-2015 09:55 AM

I understood residuals now.

How does an error term exists in the model? May I request you to give an simple example please.

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02-18-2015 11:12 AM

A simple regression model looks like this

y = b0 + b1*X + e

e is the error term, b0 is the intercept and b1 is the slope

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02-18-2015 12:52 PM

Thanks.

Where that 'e' comes from?

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02-18-2015 01:08 PM

- FYI the Stats course for SAS is free via the SAS Analytics U homepage.
- From wikipedia:
- http://en.wikipedia.org/wiki/Regression_analysis
- Theoretical Model with e :
- Fitted model:
The residual, , is the difference between the value of the dependent variable predicted by the model, , and the true value of the dependent variable, .

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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.

Steve Denham