Interpretation Of Multiple Regression Equation

Given the assumptions of the classical regression model, it follows that, on taking the conditional expectation of Y on both sides of (7.1.1), we obtain

In words, (7.2.1) gives the conditional mean or expected value of Y conditional upon the given or fixed values of X2 and X3. Therefore, as in the two-variable case, multiple regression analysis is regression analysis conditional upon the fixed values of the regressors, and what we obtain is the average or mean value of Y or the mean response of Y for the given values of the regressors.

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