&Y=f(X)+ effect of all other variables =Y=f(X)+e .o e is the effect of all other variables &o the influence on Y is from two parts os Variation in Y Explained by changes X(Explained Variation cOVariation in Y not explained by changes in X (Unexplained Variation &o The Total Variation in y='Explained variation+ Unexplained Variation In Graph 1, Unexplained Variation is nil In Graph 2, Explained variation is large relative to the Unexplained variation❖Y= f(X) + effect of all other variables =Y = f(X) + e ❖ e is the effect of all other variables ❖The influence on Y is from two parts Variation in Y Explained by changes X (Explained Variation ) Variation in Y not explained by changes in X (Unexplained Variation ) ❖The Total Variation in Y' = 'Explained Variation' + 'Unexplained Variation' －In Graph 1, Unexplained Variation is nil －In Graph 2, Explained Variation is large relative to the Unexplained Variation