R-squared ($\text{R}^2$) is a key statistical metric used to evaluate the goodness-of-fit of a statistical model, such as Marketing Mix Modeling (MMM). It indicates the proportion of the variance in the dependent variable that is predictable from the independent variables. $\text{R}^2$ ranges from 0 to 1, where a value of 0 suggests the model has no explanatory power (it doesn’t fit the data), and a value of 1 indicates a perfect fit (all data points align with the prediction).
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