An example: Imagine these two predictors: Reality: 1 1 1 1 1 9 1 1 1 1 Predic1: 2 2 2 2 2 2 2 2 2 2 Predic2: 3 3 3 3 3 6 3 3 3 3 SumOfErrors(

An example: Imagine these two predictors: Reality: 1 1 1 1 1 9 1 1 1 1 Predic1: 2 2 2 2 2 2 2 2 2 2 Predic2: 3 3 3 3 3 6 3 3 3 3 SumOfErrors(Predic1) is 16 SumOfErrors(Predic2) is 21 So Predic1 was better then Predic2? No. Because correctly predicting the one outlier shows more predictive power then staying close to the average. Therefore we use SumOfSquerrors: SumOfSquerrors(Predic1) is 58 SumOfSquerrors(Predic2) is 45 This shows that Predic2 is "better" and we are happy :)