The error term in the regression model represents all factors that determine the criterion variables that are not part of the model.

Question

Quizplus · Accepted Answer

The error term or residual term in the regression model represents the variability in the dependent or criterion variable that is not explained by the predictor or independent variables included in the model. It may contain random measurement errors, omitted variables, and unmeasured factors that affect the outcome. Therefore, it serves as a proxy for the influence of all factors that are not explicitly accounted for in the model.

The Error Term in the Regression Model Represents All Factors