Advances and Applications in Statistics
© 2018 Pushpa Publishing House, Allahabad, India
http://www.pphmj.com
http://dx.doi.org/10.17654/AS052060375
Volume 52, Number 6, 2018, Pages 375-389 ISSN: 0972-3617
Received: January 22, 2018; Accepted: March 25, 2018
Keywords and phrases: seemingly unrelated regression (SUR), weight least absolute
deviations (WLAD), general weight least absolute deviations (GWLAD), weight least
absolute deviations ridge (WLAD_Ridge), general weight least absolute deviations ridge
(GWLAD_Ridge), least absolute deviations (LAD) cross validation criteria.
WEIGHT LAD AND WEIGHT LAD RIDGE
ESTIMATOR FOR SEEMINGLY UNRELATED
REGRESSION MODELS
Tarek M. Omara
Department of Statistics, Mathematics and Insurance
Faculty of Commerce
Kafrelsheikh University
Egypt
Abstract
In this paper, we introduce the four new estimators for seemingly
unrelated regression (SUR) model, viz., weight least absolute
deviations (WLAD), general weight least absolute deviations
(WGLAD), weight least absolute deviations ridge (WLAD_Ridge)
and general weight least absolute deviations ridge (GWLAD_Ridge)
estimator. The LAD and GLAD estimators are sensitive to the
leverage point, so the WLAD and WGLAD are suitable alternatives to
deal with this problem. On the other hand, the ridge estimator is used
when the predictors are highly collinear. The weight least absolute
deviations ridge (WLAD_Ridge) and general weight least absolute
deviations ridge (GWLAD_Ridge) estimators combine the interesting
features of weight least absolute deviations (WLAD) and ridge
estimators. The aim of these estimators is to resist the outliers,
leverage point and at the same time shrinking coefficient to solve the
multicollinearity simultaneously in SUR model. We chose ridge