Question

What effects can outliers have on a regression? What should you do when you have an outlier? (4 points) 9.

Answer 1

I you have very large data then there is less effect of outlier in regression but if you have very small data and there is a outlier in your data it impacts lot in your regression.

if you have data , then first check weather there is outliers in data or not.

methods to detect outliers.

1)Box plot method

Box plots may also have lines extending vertically from the boxes (whiskers) indicating variability outside the upper and lower quartiles, hence the terms box-and-whisker plot and box-and-whisker diagram.

2)Scatter plot :

by using scatter plot . if observation lies very outside from group observation .it is outlier.

What to do with outlier:

1) check outlier observation : suppose you have data for human age and there is one observation which have age = 205 so, it is an outlier . there are many reasons for outliers this may be a typo mistake.

you can remove this outlier by manual checking or replacing it with central value like mean , median .

2)Remove the observation which is an outlier.

Thanks...