6.7 Prediction

$y_{Leia} = \color{blue}{5.56} + \color{orange}{-0.66} \times x_{1Leia} + \color{orange}{0.12} \times x_{2Leia} + \color{red}{\varepsilon}_{Leia}$

$5 = \color{blue}{5.56} + \color{orange}{-0.66} \times 0 + \color{orange}{0.12} \times 1 + \color{red}{-0.69} = \color{green}{5.69} + \color{red}{-0.69}$

Name	$trust2006$	$\boldsymbol{\color{blue}{\beta_{0}}}$	$\boldsymbol{\color{orange}{\beta_{1}}}$	$victim2006$	$\boldsymbol{\color{orange}{\beta_{2}}}$	$education2006$	$\boldsymbol{\color{red}{\varepsilon}}$	$\color{green}{\widehat{y}}$
Daniel	5	5.56	-0.66	1	0.12	1	-0.02	5.02
Leia	5	5.56	-0.66	0	0.12	1	-0.69	5.69
Harrison	7	5.56	-0.66	0	0.12	5	0.81	6.19
..	..	..	..	..	..	..	..	..

• Important: Prediction is used in two differnent ways
  • A model’s prediction of observations in the dataset on which the model is based
  • A model’s predictions for observations in another dataset