Calculating Residuals: Measuring the Accuracy of Predictions

The video tutorial explains how to measure the accuracy of predictions using residuals. It begins by introducing the concept of a line of best fit and how it is used to make predictions. The tutorial then details the process of calculating residuals by comparing actual data points to predicted values from the regression equation. It emphasizes the importance of the line of best fit, despite the presence of residuals, and explains how residuals can be positive or negative depending on their position relative to the line. The tutorial concludes by highlighting the balancing nature of residuals in data analysis.

What does it mean if a data point falls above the line of best fit?

Describe the relationship between actual values and predicted values in the context of residuals.