Definition of Error term:
A term used to describe the margin of error which exists in a statistical or mathematical model. An error term is created when a model does not precisely depict the relationship between different types of variables. Actual results will vary from that depicted in the model due to outside factors. Also called residual or remainder term.
The error term is also known as the residual, disturbance, or remainder term, and is variously represented in models by the letters e, ε, or u.
An error term is a residual variable produced by a statistical or mathematical model, which is created when the model does not fully represent the actual relationship between the independent variables and the dependent variables. As a result of this incomplete relationship, the error term is the amount at which the equation may differ during empirical analysis.
How to use Error term in a sentence?
- The error term is a residual variable that accounts for a lack of perfect goodness of fit.
- Heteroskedastic refers to a condition in which the variance of the residual term, or error term, in a regression model varies widely.
- An error term appears in a statistical model, like a regression model, to indicate the uncertainty in the model.
Meaning of Error term & Error term Definition