I have encountered this formula in econometrics book in chapter about regression with 1 independent variable:
$\hat{\sigma}^2 = \frac{1}{N}\sum_{i=1}^N (y_i - b_0 - b_1x_i)^2$
I understand that hat over left part means that it is estimate and $\sigma^{2}$ means variance. But I can't understand estimated variance of what it is.