Influential Observations in Stochastic Model of Divisia Index Numbers with AR(1) Errors


We use the general form of hat matrix and DFBETA measures to detect the influential observations in order to estimate the Divisia price index number when the error structure is first order serial correlation. An example is presented with reference to price data of Pakistan. Hat values show the noteworthy findings that the corresponding weights of consumer items have large influence on the parameter estimates and are not affected by the parameter of autoregressive process AR(1). Whereas DFBETAs for Divisia index numbers depend on both the weights and autoregressive parameter.

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Burney, S. and Maqsood, A. (2014) Influential Observations in Stochastic Model of Divisia Index Numbers with AR(1) Errors. Applied Mathematics, 5, 975-982. doi: 10.4236/am.2014.56093.

Conflicts of Interest

The authors declare no conflicts of interest.


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