Updated: Aug 20, 2021

In a regression, this is the difference between the observed value of the dependent variable and its value predicted by the estimated regression equation. The residuals from a regression form the basis of many econometric tests.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.