Consider a simple linear regression model with 7 observations and 2 independent variables. The following table shows the calculated leverage, studentized residuals, and Cook’s distance for each observation:
|Observation||Leverage||Studentized Residual||Cook’s Distance|
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“It’s not going to be easy, but it’s going to be worth it.”
Based on the table, which observation would you consider to be an outlier and why?
If you were to remove one observation to improve the model, which one would you choose and why?
Determine and justify the potentially influential observations in the table using the criteria for Cook’s D involving k and n.
Based on the table, recommend what actions, if any, you should take to deal with any influential observations.
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