Forecasting is an important tool used by businesses to plan and evaluate their operations. One of the most commonly used techniques for forecasting is regression analysis. Often forecasts are produced based upon a set of comparable units which could be individuals, groups, departments or companies that perform similar activities such as a set of banks, a group of mangers and so on. We apply a methodology that includes a new independent variable, the comparable unit's DEA relative efficiency, into the regression analysis. The results of applying this methodology to the performance of commercial banks over time will be presented.
FOR PREDICTING U . S. COAL MINING FATALITIES AThT B e d m i n s t e r , N J 07921 Lawrence C . Marsh U n i v e r s i t y of N o t r e Dame N o t r e Dame, I N 46556 Key Words and Phrases: rnuZticoZZinearity; robust regression; ridge regression; o u t l i e r s ; robust veighting. ABSTRACT T h i s p a p e r compares a l t e r n a t i v e c o m b i n a t i o n s o f r i d g e r e g r e s s i o n and r o b u s t r e g r e s s i o n t e c h n i q u e s i n p r e d i c t i n g f a t a l i t i e s i n t h e U.S. c o a l m i n i n g i n d u s t r y . The combined r o b u s t r i d g e a p p r o a c h is needed b e c a u s e of t h e s i m u l t a n e o u s o c c u r r e n c e of m u l t i c o l l i n e a r i t y and o u t l i e r s i n t h e d a t a . Not s u r p r i s i n g l y , t h e r e l a t i v e e f f e c t i v e n e s s of d i f f e r e n t r i d g e e s t i m a t o r s i n p r e d i c t i n g c o a l m i n i n g f a t a l i t i e s i s found t o b e d e p e n d e n t upon t h e p a r t i c u l a r c h o i c e of t h e r o b u s t w e i g h t i n g scheme employed.
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