Observed/Fitted Values and Residuals on Categorical Variables

Recall that we defined the following three concepts:

• Observed values$𝑦$, or the observed value of the outcome variable

• Fitted values $\hat y$, or the value on the regression line for a given$𝑥$value

• Residuals $y - \hat y$, or the error between the observed value and the fitted value

We obtained these values and other values using the get_regression_points() function from the moderndive package. This time, however, let’s add an argument setting ID = "country" that tells the function to use the variable country in gapminder2007 as an identification variable in the output. This will help contextualize our analysis by matching values to countries.