virhevarianssista
Virhevarianssi refers to the variance of the error term in statistical models, particularly in regression analysis. It quantifies the degree of scatter or dispersion of the observed data points around the predicted regression line. A smaller error variance suggests that the model fits the data well, with most of the variation in the dependent variable explained by the independent variables. Conversely, a larger error variance indicates that the model does not capture the underlying relationships effectively, and a significant portion of the variation remains unexplained.
Estimating the error variance is crucial for several reasons. It is a key component in calculating standard
In the context of ordinary least squares (OLS) regression, the error variance is typically estimated by the