Advanced Search
MyIDEAS: Login to save this article or follow this journal

Beware of 'Good' Outliers and Overoptimistic Conclusions

Contents:

Author Info

  • Catherine Dehon
  • Marjorie Gassner
  • Vincenzo Verardi

Abstract

The main goal of this paper is to warn practitioners of the danger of neglecting outliers in regression analysis, in particular, good leverage points (i.e. points lying close to the regression hyperplane but outlying in the "x"-dimension). While the types of outliers which do influence regression estimates (vertical outliers and bad leverage points) have been extensively investigated, good leverage points have been largely ignored, probably because they do not affect the estimated regression parameters. However, their effect on inference is far from negligible. We propose a step-by-step procedure to identify and treat all types of outliers. The paper of Persson and Tabellini ["American Economic Review" (2004) Vol. 94, pp. 25-46] linking the degree of proportionality of an electoral system to the size of government is discussed to illustrate how the choice of a measure and the existence of atypical observations may substantially influence results. Copyright (c) Blackwell Publishing Ltd and the Department of Economics, University of Oxford, 2009.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0084.2009.00543.x
File Function: link to full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics and Statistics.

Volume (Year): 71 (2009)
Issue (Month): 3 (06)
Pages: 437-452

as in new window
Handle: RePEc:bla:obuest:v:71:y:2009:i:3:p:437-452

Contact details of provider:
Postal: Manor Rd. Building, Oxford, OX1 3UQ
Email:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0305-9049
More information through EDIRC

Order Information:
Web: http://www.blackwellpublishing.com/subs.asp?ref=0305-9049

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Badi H. Baltagi & Georges Bresson, 2012. "A Robust Hausman-Taylor Estimator," Center for Policy Research Working Papers 140, Center for Policy Research, Maxwell School, Syracuse University.
  2. Verardi, Vincenzo & Wagner, Joachim, 2010. "Productivity Premia for German Manufacturing Firms Exporting to the Euro-Area and Beyond: First Evidence from Robust Fixed Effects Estimations," IZA Discussion Papers 4964, Institute for the Study of Labor (IZA).
  3. Salois, Matthew J., 2012. "Obesity and diabetes, the built environment, and the ‘local’ food economy in the United States, 2007," Economics & Human Biology, Elsevier, vol. 10(1), pages 35-42.
  4. Maria Vera-Cabello & Marcos Sanso-Navarro & Fernando Sanz, 2011. "The impact of the American Civil War on city growth," ERSA conference papers ersa11p1514, European Regional Science Association.
  5. Verardi, Vincenzo & Wagner, Joachim, 2010. "Robust Estimation of Linear Fixed Effects Panel Data Models with an Application to the Exporter Productivity Premium," IZA Discussion Papers 4928, Institute for the Study of Labor (IZA).
  6. Salois, Matthew J., 2011. "Obesity and Diabetes, the Built Environment, and the 'Local' Food Economy," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103649, Agricultural and Applied Economics Association.
  7. Liebermann, Joelle, 2010. "Real-time nowcasting of GDP: Factor model versus professional forecasters," MPRA Paper 28819, University Library of Munich, Germany.
  8. Biewen, Martin & Weiser, Constantin, 2011. "A New Approach to Testing Marginal Productivity Theory," IZA Discussion Papers 6113, Institute for the Study of Labor (IZA).
  9. Liebermann, Joelle, 2011. "The Impact of Macroeconomic News on Bond Yields: (In)Stabilities over Time and Relative Importance," Research Technical Papers 7/RT/11, Central Bank of Ireland.
  10. Goetghebuer, Tatiana, 2011. "Productive inefficiency in patriarchal family farms: evidence from Mali," Proceedings of the German Development Economics Conference, Berlin 2011 34, Verein für Socialpolitik, Research Committee Development Economics.
  11. Dehon, Catherine & Gassner, Marjorie & Verardi, Vincenzo, 2009. "A Hausman-type test to detect the presence of influential outliers in regression analysis," Economics Letters, Elsevier, vol. 105(1), pages 64-67, October.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bla:obuest:v:71:y:2009:i:3:p:437-452. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.