About the Economy Growth Example

The Economy Growth example uses the Distance by Distance graph, which is generated using the ROBUSTREG procedure. The main purpose of robust regression is to detect outliers and leverage points and to provide stable results in the presence of such influential points.

This graph identifies leverage points for economic growth data for different countries. The distances displayed are appropriately scaled. They measure the distance from the center of the data to the observation. The vertical axis distance is a robust version of the classical distance measure on the horizontal axis. Observations with large discrepancies between these two distances have high leverage. The diagonal reference line helps to identify these observations. Such observations also have large ROBUST MCD distance; those observations that are above the horizontal leverage cutoff line are considered leverage points.

The data used in this example was obtained from a national growth study conducted by De Long and Summers in 1991. (footnote1)