Goal of small residuals
When fitting a model to data, the fitted values are unlikely to match exactly the observed response values and the prediction 'errors' are the residuals,
ei = yi − | ![]() |
'Small' residuals are desirable.
Least squares
The size of the residuals is described by their sum of squares,
SSResidual | ![]() |
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The least squares estimates of b0, b1 and b2 are the values that minimise this.
The solution can be obtained algebraically but the formulae are relatively complex and a computer should be used to evaluate the least squares estimates.