yossarian22
Resident Schizophrenic
Its basic algebra. Nowhere near calculus.That is a lot of responses to come back to and I don't really have the effort to respond to them all. I will say that it's rather funny that you are trying to explain calculus
Do you?instead of addressing the very simple observation that short-term does not equal long-term. Do you know what a logarithmic curve looks like?
We transform the unit. Its like going from inches to meters. Radioactive decay is not linear at all, but we can make appear as such for the purpose of calculations
Yes, the data would look linear on a graph. But we can tell if a relationship is non-linear or linear with a residual plotIf you were to only measure the short term, you would have the impression of near linearity.
Hence why we plot residuals. Here is what a linear equation looks like on a residual chartBut it a logarithmic curve actually linear in the long-term? Very simple concept here.
Notice how the data is randomly scattered above the line y=0
Now here is what the residual plot would look like if the data was non linear, even if our data looked linear when graphed
There is a clear curve in this data. While it may have looked linear when graphed, it clearly is not.