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What is a residual? Why are residuals important when performing a regression analysis?

What is a residual? Why are residuals important when performing a regression analysis?

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A residual is the vertical distance between a data point and the regression line.

A residual is the vertical distance between a data point and the regression line. In other words, the residual is the error that isn't explained by the regression line. The residual(e) can also be expressed with an equation. The 'e' is the difference between the predicted value () value and the observed value(y).

Residual plot is a graph that shows the residuals on the vertical axis and the independent variable on the horizontal axis. If the points in a residual plot are randomly dispersed around the horizontal axis, a linear regression model is appropriate for the data; otherwise, a non-linear model is more appropriate.

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