Simple Linear Regression

Simple linear regression fits the data to a line with one input, a slope and an intercept:

is the intercept.

is the slope.

The regression model is:

is the observed value

is the difference between the observed value and the predicted value (the value o the line give by ). So if the observed value is above the line, the error is positive and negative if the observed value is below the line.

and are called the regression coefficients or the regression parameters.