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The plot of residuals by predicted values clearly shows the
two most underperforming vehicles.
Additionally, you can see that
the Breeze, Prowler, SW, and Explorer are quite close to the majority
of cases. This suggests that
the apparent underperformance of the Breeze, Prowler, and SW
and overperformance of the Explorer could be due to random chance.
What is somewhat disturbing in this plot are the clusters of cases
far to the left and to the right of the general cluster of cases.
While the vehicles in these clusters do not have large residuals, their
distance from the general cluster may have given these cases undue
influence in determining the regression coefficients.
Graphs
The resulting scatterplot shows points far to the right of the others.
The scatterplot reveals that the unusual points noted in the residuals by predicted values scatterplot are high-priced vehicles. The distribution of prices appears to be right-skewed, so you may want to use standardized log-transformed prices in future analyses.
The resulting scatterplot shows points far to the right of the others.
The points to the right of the general cluster in the plot correspond to points to the right of the general cluster in the residuals by predicted values scatterplot. As with the price distribution, you may want to use standardized log-transformed wheelbase in future analyses. |
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Residual Scatterplots |