Open AccessPENERAPAN METODE GENERALIZED RIDGE REGRESSION DALAM MENGATASI MASALAH MULTIKOLINEARITAS
Author(s) -
Ni Ketut Tri Utami,
I Komang Gde Sukarsa
Publication year - 2013
Publication title -
e-jurnal matematika
Language(s) - English
Resource type - Journals
ISSN - 2303-1751
DOI - 10.24843/mtk.2013.v02.i01.p029
Subject(s) - multicollinearity , variance inflation factor , mathematics , statistics , regression analysis , estimator , ridge , regression , mean squared error , variables , ordinary least squares , variance (accounting) , geography , business , cartography , accounting
Ordinary least square is parameter estimation method for linier regression analysis by minimizing residual sum of square. In the presence of multicollinearity, estimators which are unbiased and have a minimum variance can not be generated. Multicollinearity refers to a situation where regressor variables are highly correlated. Generalized Ridge Regression is an alternative method to deal with multicollinearity problem. In Generalized Ridge Regression, different biasing parameters for each regressor variables were added to the least square equation after transform the data to the space of orthogonal regressors. The analysis showed that Generalized Ridge Regression was satisfactory to overcome multicollinearity.