How well does your model explain your data? R-squared is a useful statistic for answering this question. In this episode we explore how it applies to the problem of valuing a house. Aspects like the number of bedrooms go a long way in explaining why different houses have different prices. There's some amount of variance that can be explained by a model, and some amount that cannot be directly measured. R-squared is the ratio of the explained variance to the total variance. It's not a measure of accuracy, it's a measure of the power of one's model.
![cover of episode [MINI] R-squared](https://static.libsyn.com/p/assets/1/1/d/a/11dadbe155a21c0e/r-squared.png)
