Resolved: Linearity Quiz Qn: Linearity is easy to relax
Could someone elaborate on what it means to "relax" linearity?
thanks
1 answers ( 1 marked as helpful)
Hey Ryan,
Thank you for reaching out!
One of the key assumptions of OLS is linearity, which means that the change in the dependent variable is proportional to the change in the independent variables. However, in real-world data, this assumption is often too restrictive.
Relaxing the linearity assumption means allowing for more flexibility in the model to capture non-linear relationships between variables. One way to do this (demonstrated in Linear Regression Practical Example (Part 2)) is to apply a tranformation (for example, a log-transformation) to the dependent or independent variables to make their relationship more linear.
Hope this helps!
Kind regards,
365 Hristina