Least squares method

What is the least squares method (LSM)? Through this method, systems of equations are solved. The least squares method is used:
• to solve systems of linear equations;
• in data approximation;
• in linear regression.

The least squares method, thanks to the works of Markov A.A., has been used in the framework of estimation theory of mathematical statistics since the beginning of the last century. The essence of LSM in brief – is a method used for solving specific practical tasks. LSM is based on minimizing the sum of squares of deviations of functions from variables that need to be calculated mathematically.

Optimal way to find the slope, Y-intersection and derive the equation of the line-Y – use the online calculator. Enter a certain number of pairs into the field and calculate the result.

Example of practical tasks:
• the least squares method is used for calculating the dependency of the annual turnover of an enterprise/of the organization on the size of the sales area;
• calculation of the dependency of the annual turnover of the enterprise/of the organization on the average number of customers;
• for estimating the parameters of a single-factor econometric model.

The practical essence of LSM: the sum of squares of possible errors of a specific model should be minimal.