Linear regression A ssumptions 1. The average value of the dependent variable y is a linear function ofX. 2. The only random component of the linear model is the error term 8. The values of X are assumed to be fixed 3. The errors between observations are uncorrelated. In addition, for any given value ofx, the errors are are normally distributed with a mean of zero and a constant variance mit 人 16881Linear Regression Assumptions 1. The average value of the dependent variable Y is a linear function ofX. 2. The only random component of the linear model is the error term ε. The values of X are assumed to be fixed. 3. The errors between observations are uncorrelated. In addition, for any given value ofX, the errors are are normally distributed with a mean of zero and a constant variance. 16.881 MIT