Fitted values

To assess how well a particular linear model fits any one of our data points, (xiyi), we might consider how well the model would predict the y-value of the point,

 =  b0 + b1 xi

These predictions are called fitted values.

Residuals

The difference between the i'th fitted values and its actual y-value is called its residual.

ei  =  yi

The residuals describe the 'errors' that would have resulted from using the model to predict y from the x-values of our data points.

Note that the residuals are the vertical distances of the crosses to the line.