Is the 45 degree line an indicator because we used the logaritmic transformation?
We look for a best fitting model to the standarized variables that we are dealing with? Or I'm mixing it all up now :D
1 answers ( 0 marked as helpful)
Hey,
Thank you for reaching out and apologies for the late reply.
The log-transformation of the price column was necessary to obtain a linear relationship with the independent variables.
The 45-degree line in the lesson indicates instead that the predictions of the linear model (y_hat_test) are very close to the actual values of the price (y_test). Both y_test and y_hat_test are log-transformed.
Let me know if anything has remained unclear.
Kind regards,
365 Hristina
