Sources of influential observations include: (i) improperly recorded data, (ii) observational errors in the data, (iii) misspecification and (iv) outlying data points that are legitimate and contain valuable information which improve the efficiency of the estimation. It is constructive to isolate extreme points and to determine the extent to which the parameter estimates depend upon these desirable data.
CITATION STYLE
Baltagi, B. H. (2011). Regression Diagnostics and Specification Tests. In Econometrics (pp. 179–221). Springer Berlin Heidelberg. https://doi.org/10.1007/978-3-642-20059-5_8
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