I have a quick question:
I used a multiple regression to predict the price of real-estate. The population has been divided into a training and testset. The regression model has predicted the prices for the testset and I also know the differences between the actual prices and the predicted prices.
Now I want to know if the difference between actual prices and predicted prices is significant. I want to do this with a t-test and made the differences absolute and performed a two-tailed t-test:
t.test(verschillen.test$verschil, mu=0, alt = "two.sided")
H0: the difference between predicted and actual is 0
But i'm kind of doubting this approach.
Is it possible to test this with a t-test ?
and should I make the difference absolute? I did this because otherwise large negative differences and positives differences will cancel each other out?
Thank you in advance!
With kind regards