The estimated error variance s02 represents the variance of the mean weighted residual and is thus a measure of goodness-of-fit:
The a posteriori error variance so2 or a priori error variance sigma02 is used in the subsequent error analysis. For example, the covariance matrix of the estimated parameters, Cpp, is directly proportional to the scalar s02 or sigma02, respectively. Note that if the residuals are consistent with the distributional assumption about the measurement errors (i.e., matrix Czz), then the estimated error variance s02 assumes a value close to one. The user must decide whether the error analysis should be based on the a posteriori or a priori error variance. The decision can also be delegated to the Fisher Model Test (see command >>> FISHER). iTOUGH2 uses the a posteriori error variance s02 by default. However, for design calculations or synthetic inversions, the error analysis should be based on the a priori variance sigma02 which is 1 by definition.
>>> based on A PRIORI error variance