Basic Statistics and Data Analysis

Lecture notes, MCQS of Statistics

In Statistics and Optimization, ​Statistical Errors​ and ​Residuals​ are two closely related

Question: Differentiate Between Errors and Residuals in the Linear Model

In Statistics and Optimization, Statistical Errors and Residuals are two closely related and easily confused measures of “Deviation of a sample from the mean”.

Error is misnomer; an error is the amount by which an observation differs from its expected value. The errors e are unobservable random variable, assumed to have zero mean and uncorrelated elements each with common variance  σ2.

A Residual, on the other hand, is an observable estimate of the unobservable error. The residuals $\hat{e}$ are computed quantities with mean ${E(\hat{e})=0}$ and variance ${V(\hat{e})=\sigma^2 (1-H)}$.

Like the errors, each of the residuals has zero mean, but each residual may have a different variance. Unlike the errors the residuals are correlated. The residuals are linear combinations of the errors. If the errors are normally distributed so are the errors.

Note that the sum of the residuals is necessarily zero, and thus the residuals are necessarily not independent. The sum of the errors need not be zero; the errors are independent random variables if the individuals are chosen from the population independently.

The Author

Muhammad Imdadullah

Student and Instructor of Statistics and business mathematics. Currently Ph.D. Scholar (Statistics), Bahauddin Zakariya University Multan. Like Applied Statistics and Mathematics and Statistical Computing. Statistical and Mathematical software used are: SAS, STATA, GRETL, EVIEWS, R, SPSS, VBA in MS-Excel. Like to use type-setting LaTeX for composing Articles, thesis etc.

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