What is 'Nonlinear Regression'

Nonlinear regression is a form of regression analysis in which data is fit to a model and then expressed as a mathematical function. Simple linear regression relates two variables (X and Y) with a straight line (y = mx + b), while nonlinear regression must generate a line (typically a curve) as if every value of Y was a random variable. The goal of the model is to make the sum of the squares as small as possible. The sum of squares is a measure that tracks how much observations vary from the mean of the data set. It is computed by first finding the difference between the mean and every point of data in the set. Then, each of those differences is squared. Lastly, all of the squared figures are added together. The smaller the sum of these squared figures, the better the function fits the data points in the set. Nonlinear regression uses logarithmic functions, trigonometric functions, exponential functions, and other fitting methods.

BREAKING DOWN 'Nonlinear Regression'

Nonlinear regression modeling is similar to linear regression modeling in that both seek to graphically track a particular response from a set of variables. Nonlinear models are more complicated than linear models to develop because the function is created through a series of approximations (iterations) that may stem from trial-and-error. Mathematicians use several established methods, such as the Gauss-Newton method and the Levenberg-Marquardt method.

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