If you have considered all relevant explanatory factors, the residuals from a multiple regression model should be random.

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Quizplus · Accepted Answer

Yes, if all relevant explanatory factors have been included in the model, the residuals should be random with no pattern or correlation to any of the variables. This indicates that the model is a good fit for the data and that no other significant factors need to be included. If the residuals show a pattern, it suggests that there are other explanatory variables that have not been included in the model or that the functional form of the model is incorrect. If all relevant explanatory factors have been considered and included in the model, the residuals should not show any systematic patterns or trends. This randomness of residuals indicates that the model has accounted for all the variability in the dependent variable that can be explained by the independent variables.

If You Have Considered All Relevant Explanatory Factors, the Residuals