Evidence-Based Management

Figure 9.9

Unfortunately, a residual plot is often not available. In that case, we can use the multiple R-squared instead. (Note that this indicator is different from the r-squared above, which involves squaring a correlation coefficient to find out how much covariation exists between two metrics. That is why we use a lower-case r for the variance explained and a capital R for the goodness of fit). In a regression analysis, the R² tells us how close the observed data are to the regression line. Put differently, it is the percentage of the outcome metric that, based on the regression coefficient, is predicted by the predictor metric. For example, ...