#### Systematic component

In a typical regression model the
actual value of a variable called "dependent" is "explained" by a set of regressors
or explanatory variables. This can be represented as follows:

ACTUAL = FITTED +
ERROR

The FITTED part of the regression
model is what the analyst can measure, and estimate. It is referred to as the
systematic component of the regression model.

ERROR refers to the difference (a
residual) between what is observed and what is measured. This is also referred
to as the unsystematic component of the regression model. opulation consists
of the total collection of observations that are of interest to the decision
maker.

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