Atypical observations in linear models |
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| Authors: | A Chowdhury U Balasooriya |
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| Institution: | 1. Department of Economics , University of New England , Australia;2. Department of Economics &3. Statistics , National University of Singapore |
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| Abstract: | The problem of ‘atypical data point’ in the estimation of model parameters and its effect on prediction are discussed. A cross-validity procedure is then proposed to accommodate the unusual observations in the estimation and thereby to improve the prediction of future data points. Each atypical point, weighted according to cross-validitory procedure, is used in the estimation of model parameters. |
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