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