Intro to Probability for Business
Goodness-of-fit refers to a statistical measure that assesses how well a model's predicted values align with the actual observed data. In the context of multiple regression, it helps determine if the model is appropriate for the given data by comparing the distribution of the residuals to what is expected under a particular statistical model. A good fit indicates that the model adequately captures the relationships in the data, while a poor fit suggests that the model may need revision or that important variables may be missing.
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