Multiple regression models operate under the following assumptions:

- A linear relationship exists between dependent and independent variables
- The independent variables are not random, and there is no exact linear relation between any two or more independent variable
- The independent variable is uncorrelated with the residual term
- The expected value of the residual term is zero
- There is a constant variance with of the residual term
- The residual term is independently distributed; that is, the residual term for one observation is nor correlated with that of another observation
- The residual term is normally distributed