Description of the model in terms of a response distribution
The normal linear model describes the distribution of Y for any value of X. It can be expressed in two different forms.
It is worth stressing here that in practical situations,
The slope and intercept of the regression line, β0 and β1, are unknown parameters. The errors, ε, therefore cannot be determined exactly.
In the next section, we will see how these quantities can be estimated.
Band containing about 95% of values
Example