Intro to Econometrics
Influential observations are data points in a regression analysis that have a significant impact on the estimated parameters of the model. These observations can disproportionately affect the slope and intercept of the regression line, potentially skewing results and interpretations if not identified and managed properly. Recognizing influential observations is crucial for ensuring the reliability of statistical inferences and enhancing the overall accuracy of the model's predictions.
congrats on reading the definition of Influential Observations. now let's actually learn it.