A Line Models the Data
        120                                                         120
        100                                                         100
          80                                                          80
                    80         100         120                                  80         100        120
        120                                                         120
        100                                                         100
          80                                                          80
                    80         100         120                                  80         100        120
                                                                                         Linear Regression     Slide #2
                             Homoscedasticity
                                 120
                                 100
                                   80
                                             80         100        120
        120                                                         120
        100                                                         100
          80                                                          80
                    80         100         120                                  80         100        120
                                                                                         Linear Regression     Slide #3
                                 Other Problems
      • Outliers
            –a problem because the model does not fit that point
            –may or may not remove
      • Influential Points
            –a point that would markedly change the line if it 
               were removed
            –typically an outlier in the x direction
                                                                                         Linear Regression     Slide #4