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Robust Methods of Building Regression Models—An Application to thè Housing Sector |
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| Authors: | Daniel Peña Javier Ruiz-Castillo |
| Institution: | 1. Escuela de lingenieros Industriales, Universidad Politécnica de Madrid , Madrid , Spain;2. Departmento de Teoría Económica , Universidad Complutense de Madrid , Madrid , Spain |
| Abstract: | This article studies robustification strategies for the linear model in the presence of outliers. The advantages of an internal analysis of the robustness of least squares for a given sample are pointed out. The application of this methodology is illustrated by building an explicit model of the determinants of rental housing values in the Madrid Metropolitan Area. |
| Keywords: | Outlierse Influential observations Robust regression Cook distance Hedonic price function Housing market |