Learn the Concept of linearity in Regression Models

This Tutorial talks about basics of Linear regression by discussing in depth about the concept of Linearity and Which type of linearity is desirable. What is the meaning of the term Linear? Linear regression however always means linearity in parameters, irrespective of linearity in explanatory variables. Here the variable X can be non linear i.e X or X² and still we can consider this as a linear regression. However if our parameters are not linear i.e say the regression equation is A function Y f(x) is said to be linear in X if X appears with a power or index of 1 only. Y is linearly related to X if the rate of change of Y with respect to X (dY/dX) is independent of the value of X.