Assessing multicollinearity via identification of high leverage points in financial accounting data / Norazan Mohamed Ramli ... [et al.]

Inaccurate and invalid statistical inferences in regression analysis may be caused by multicollinearity due to the presence of high leverage points (HLP) in a data set. Therefore, it is important that high leverage point which is a form ofoutlier be detected because its existence can lead to misfitt...

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Main Authors:	Mohamed Ramli, Norazan, Mahmud, Zamalia, Zakaria, Husein, Idris, Mohammad Radzi, Abdul Aziz, Alizan
Format:	Article
Language:	English
Published:	Research Management Institute (RMI) 2010
Subjects:	Managerial accounting Balance sheet. Financial statements. Corporation reports. Including pro forma statements
Online Access:	http://ir.uitm.edu.my/id/eprint/13085/ http://ir.uitm.edu.my/id/eprint/13085/1/AJ_NORAZAN%20MOHAMED%20RAMLI%20SMRJ%2010%201.pdf

id	uitm-13085
recordtype	eprints
spelling	uitm-130852016-06-30T00:53:25Z http://ir.uitm.edu.my/id/eprint/13085/ Assessing multicollinearity via identification of high leverage points in financial accounting data / Norazan Mohamed Ramli ... [et al.] Mohamed Ramli, Norazan Mahmud, Zamalia Zakaria, Husein Idris, Mohammad Radzi Abdul Aziz, Alizan Managerial accounting Balance sheet. Financial statements. Corporation reports. Including pro forma statements Inaccurate and invalid statistical inferences in regression analysis may be caused by multicollinearity due to the presence of high leverage points (HLP) in a data set. Therefore, it is important that high leverage point which is a form ofoutlier be detected because its existence can lead to misfitting of a regression model, thus resulting in inaccuracy of regression results. In this paper, several methods have been proposed to identify HLP in a financial accounting data set prior to conducting further analysis of regression and other multivariate analysis. The Pearson scorrelation coefficient and variance inflation factors (VIF) were used to measure the success of a detection method. Numerical analysis showed that common diagnostics like the twice-mean and thrice-mean rules failed to detect HLP in the given data set whilst robust approaches such as the potentials and diagnostic-robust generalized potentials (DRGP) methods were found to be successful in identifying high leverage point as indicated by lower values of the Pearson s correlation coefficient and variance inflation factors. Research Management Institute (RMI) 2010 Article PeerReviewed text en http://ir.uitm.edu.my/id/eprint/13085/1/AJ_NORAZAN%20MOHAMED%20RAMLI%20SMRJ%2010%201.pdf Mohamed Ramli, Norazan and Mahmud, Zamalia and Zakaria, Husein and Idris, Mohammad Radzi and Abdul Aziz, Alizan (2010) Assessing multicollinearity via identification of high leverage points in financial accounting data / Norazan Mohamed Ramli ... [et al.]. Social and Management Research Journal, 7 (2). pp. 17-30. ISSN 1675-7017
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Teknologi MARA
building	UiTM Institutional Repository
collection	Online Access
language	English
topic	Managerial accounting Balance sheet. Financial statements. Corporation reports. Including pro forma statements
spellingShingle	Managerial accounting Balance sheet. Financial statements. Corporation reports. Including pro forma statements Mohamed Ramli, Norazan Mahmud, Zamalia Zakaria, Husein Idris, Mohammad Radzi Abdul Aziz, Alizan Assessing multicollinearity via identification of high leverage points in financial accounting data / Norazan Mohamed Ramli ... [et al.]
description	Inaccurate and invalid statistical inferences in regression analysis may be caused by multicollinearity due to the presence of high leverage points (HLP) in a data set. Therefore, it is important that high leverage point which is a form ofoutlier be detected because its existence can lead to misfitting of a regression model, thus resulting in inaccuracy of regression results. In this paper, several methods have been proposed to identify HLP in a financial accounting data set prior to conducting further analysis of regression and other multivariate analysis. The Pearson scorrelation coefficient and variance inflation factors (VIF) were used to measure the success of a detection method. Numerical analysis showed that common diagnostics like the twice-mean and thrice-mean rules failed to detect HLP in the given data set whilst robust approaches such as the potentials and diagnostic-robust generalized potentials (DRGP) methods were found to be successful in identifying high leverage point as indicated by lower values of the Pearson s correlation coefficient and variance inflation factors.
format	Article
author	Mohamed Ramli, Norazan Mahmud, Zamalia Zakaria, Husein Idris, Mohammad Radzi Abdul Aziz, Alizan
author_facet	Mohamed Ramli, Norazan Mahmud, Zamalia Zakaria, Husein Idris, Mohammad Radzi Abdul Aziz, Alizan
author_sort	Mohamed Ramli, Norazan
title	Assessing multicollinearity via identification of high leverage points in financial accounting data / Norazan Mohamed Ramli ... [et al.]
title_short	Assessing multicollinearity via identification of high leverage points in financial accounting data / Norazan Mohamed Ramli ... [et al.]
title_full	Assessing multicollinearity via identification of high leverage points in financial accounting data / Norazan Mohamed Ramli ... [et al.]
title_fullStr	Assessing multicollinearity via identification of high leverage points in financial accounting data / Norazan Mohamed Ramli ... [et al.]
title_full_unstemmed	Assessing multicollinearity via identification of high leverage points in financial accounting data / Norazan Mohamed Ramli ... [et al.]
title_sort	assessing multicollinearity via identification of high leverage points in financial accounting data / norazan mohamed ramli ... [et al.]
publisher	Research Management Institute (RMI)
publishDate	2010
url	http://ir.uitm.edu.my/id/eprint/13085/ http://ir.uitm.edu.my/id/eprint/13085/1/AJ_NORAZAN%20MOHAMED%20RAMLI%20SMRJ%2010%201.pdf
first_indexed	2023-09-18T22:49:50Z
last_indexed	2023-09-18T22:49:50Z
_version_	1777417469734944768

Assessing multicollinearity via identification of high leverage points in financial accounting data / Norazan Mohamed Ramli ... [et al.]

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