How To Calculate Mean Squared Error (MSE) In Excel - Statology

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by Zach Bobbitt Last updated on Last updated on February 27, 2020

One of the most common metrics used to measure the forecast accuracy of a model is MSE, which stands for mean squared error. It is calculated as:

MSE = (1/n) * Σ(actual – forecast)2

where:

• Σ – a fancy symbol that means “sum”
• n – sample size
• actual – the actual data value
• forecast – the forecasted data value

The lower the value for MSE, the better a model is able to forecast values accurately.

How to Calculate MSE in Excel

To calculate MSE in Excel, we can perform the following steps:

Step 1: Enter the actual values and forecasted values in two separate columns.

Step 2: Calculate the squared error for each row.

Recall that the squared error is calculated as: (actual – forecast)2. We will use this formula to calculate the squared error for each row.

Column D displays the squared error and Column E shows the formula we used:

Repeat this formula for each row:

Step 3: Calculate the mean squared error.

Calculate MSE by simply finding the average of the values in column D:

The MSE of this model turns out to be 5.917.

Additional Resources

Two other popular metrics used to assess model accuracy are MAD – mean absolute deviation, and MAPE – mean absolute percentage error. The following tutorials explain how to calculate these metrics in Excel:

How to Calculate Mean Absolute Deviation (MAD) in Excel How to Calculate Mean Absolute Percentage Error (MAPE) in Excel

Zach Bobbitt

Hey there. My name is Zach Bobbitt. I have a Masters of Science degree in Applied Statistics and I’ve worked on machine learning algorithms for professional businesses in both healthcare and retail. I’m passionate about statistics, machine learning, and data visualization and I created Statology to be a resource for both students and teachers alike.  My goal with this site is to help you learn statistics through using simple terms, plenty of real-world examples, and helpful illustrations.

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Prev How to Calculate Mean Absolute Percentage Error (MAPE) in ExcelNext How to Calculate a Five Number Summary in Excel

One Reply to “How to Calculate Mean Squared Error (MSE) in Excel”

1. Very useful article, everything described in very convenient form, without mathematical/statistical hard language. I very appreciate it, thank You brother!

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