What is a Residual?
A residual
Interpretation:
- Positive residual → actual value is above the regression line (underprediction)
- Negative residual → actual value is below the regression line (overprediction)
- Residual = 0 → point is exactly on the regression line
Example: A student studies 4 hours. The regression line predicts a score of 78. If the actual score is 85: (overprediction by 7 points... wait, underprediction: actual > predicted → positive residual → the model underestimated this student's score)
Key property of LSRL: