1. The mean values of the outcome variable for each increment of the predictor lie(s) along a straight line No pattern in the residual plot Linearity 9 All value of the outcome variable are independent Each value of the outcome variable comes from separate entity Independence 8 The residual should be normally distributed Mean residual = 0 KS is not significant Predictors should not be normally distributed Normality 7 For any two observations the residuals should be uncorrelated Autocorrelation Durbin-Watson test Independent errors 6 The variance of the residuals at each level of the predictor should be constant Residual plot Homoscedasticity 5 Predictors are uncorrelated with external variables (third variable) Uncorrelated with external variable 4 The predictor variables should not correlate too highly No perfect multicollinearity 3 Predictors should have some degree of variation Non-zero variance 2 1 Variable type Quantitative continuous unbounded Quantitative Categorical (dichotomous) Assumption name Dependent variable Outcome variable Criterion Independent variable Predictor External independent variables Residuals