Impact of simultaneous omission of a variable and an observation on a linear regression equation (Q804178)

The impact of omitting a variable on a regression equation has a venerable history. The study of the influence of an observation on a regression equation is of more recent origin but has been extensively studied. In this article we attempt to study the joint impact on a regression equation of simultaneous omission of a variable and an observation. Each observation affects the fitted regression equation differently and has a different influence on each variable. We elucidate this interrelationship among variables and observations and examine its impact on the fitted regression equation. Closed form analytical expressions for the impact of simultaneous omission of a variable and an observation on the residual sum of squares, the fitted values, and the i th predicted value are derived. We also give a statistic for testing the significance of the j th variable when the i th observation is omitted.