The Application of the Least Squares Method to Multicollinear Data (Published)
Regression analysis is an analysis that aims to determine whether there is a statistically dependent relationship between two variables, namely the predictor variable and the response variable. One of the methods for estimating multiple linear regression parameters is the Least Squares Method. Therefore, careful and meticulous analysis and selection of appropriate techniques are required to overcome the multicollinearity problem and ensure accurate and meaningful regression analysis results. Descriptive statistical table of response variables and predictor variables, where the average results are rounded. The regression equation using the OLS method is as follows: . Therefore, it is important to use special techniques such as regularization or PCA to overcome the multicollinearity problem in the data before applying the least squares method. Thus, we can obtain more stable and accurate regression coefficient estimates and a more reliable linear regression model.
Keywords: Analysis, Application, Multicollinearity, OLS method, multiple linear regression
Health Care Expenditure in Africa – An Application of Shrinkage Methods (Published)
In the literature, apart from Gross Domestic Product (GDP) per Capita, a number of factors have been identified as non-income determinants of health care expenditure. Most studies linking health care expenditure to income and other important variables have originated in advanced countries. This study considers a linear regression model via shrinkage methods to identify key predictors of health care expenditure in Africa. Shrinkage is a process of estimation where a subset of redundant predictor variables is discarded, leaving only important ones in the linear regression model. The study was based on 42 African countries for the year 2012 and GDP per Capita, Consumer Price Index (CPI), Exchange Rate (EXC), Corruption Perception Index (COP), and Population Density (POP) were identified as key predictors of Health Expenditure per Capita (HEC). A major finding identified the Elastic net model as critical in accurately estimating HEC in Africa.
Keywords: Coordinate Descent, Elastic net, Heath Expenditure per Capita, Least Absolute Shrinkage and Selection Operator, Multicollinearity