Resolved: Calculation for R-Squared
The calculation of R-squared mentioned in this video is given as:
However, checking numerous contents online, I found that the formula for R-squared is:
I couldn't reach a conclusion on which one of the options was the right one, so I decided to go this route:
and it turns out that I got the answer correctly using this video as a guideline. Then I delved further to know why and how the rest of the internet could be wrong and I realised that the formula we are working with according to this video, for SSR is:
whereas, the formulas I see flying all around is:
I also did a calculation based on their derivation of SSR and their derivation of R-squared:
and the answers are the same.
My question is that when expressing myself in public, which method should I use? The conventional one or the one presented in this video?
Hi Jonathan,
thanks for reaching out and what a great question! It seems that the formula presented in the video is a bit simplified, and doesn't seem to take into account the residual variance. I suggest you stick to the traditional expression instead, although as you've shown yourself the difference in practice can be very insignificant.
Hope this helps!
Best,
365 Eli