In multiple regression analysis, residual analysis is used to test the requirement that
A) the variation in the residuals is the same for all predicted values of Y
B) the independent variables are the direct cause of the dependent variable
C) the number of independent variables included in the analysis is correct
D) prediction error is minimized

Question

Quizplus · Accepted Answer

Residual analysis is used to check whether the assumptions of the regression model are met. One of the assumptions is homoscedasticity, which means that the variation in the residuals should be the same for all values of the predicted variable Y. Therefore, choice A is the correct answer. B is incorrect because residual analysis cannot directly test causality. C is related to model specification, which is a different issue. D is related to model fit, which is also different from residual analysis.

In Multiple Regression Analysis, Residual Analysis Is Used to Test