The Model

The model can be stated as: [ Y_i;=; _0 + _1 X_i + _i, i=1,2,..., n ; ] where

• Y is the response variable (also called dependent variable),
• X is the predictor (also called independent variable),
• and are the unknown parameters,
• is the error (also called random deviation).

Note that, Y = + X is the population regression line; while the least squares line Y = + X introduced in Chapter 2 is an estimate of this population line.