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26 May, 22:24

Exercise 16 describes a regression model that uses a car's engine displacement to estimate its fuel econ - omy. In this context, what does it mean to say that a certain car has a positive residual?

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  1. 27 May, 01:10
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    From the information, observe that there is a relationship between the fuel economy and engine size.

    The regression model is,

    Mpg = 36.25 - 3.867 Engine size

    The residual is the difference between the actual value and predicted value.

    Residual = y - ŷ

    Here, y is the actual value and ŷ is the predicted value.

    The car gets positive residual, if the actual value is greater than the predicted value.

    Therefore, in this context, a certain car has a positive residual means that the actual mileage of that particular car is greater than the predicted mileage.
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Home » Business » Exercise 16 describes a regression model that uses a car's engine displacement to estimate its fuel econ - omy. In this context, what does it mean to say that a certain car has a positive residual?
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