Stat 112: Lecture 16 Notes

1. Stat 112: Lecture 16 Notes • Finish Chapter 6: • Influential Points for Multiple Regression (Section 6.7) • Assessing the Independence Assumptions and Remedies for Its Violation (Section 6.8) • Homework 5 due next Thursday. I will e-mail it tonight. • Please let me know of any ideas you want to discuss for the final project.

2. Multiple regression, modeling and outliers, leverage and influential pointsPollution Example • Data set pollution.JMP provides information about the relationship between pollution and mortality for 60 cities between 1959-1961. • The variables are • y (MORT)=total age adjusted mortality in deaths per 100,000 population; • PRECIP=mean annual precipitation (in inches); EDUC=median number of school years completed for persons 25 and older; NONWHITE=percentage of 1960 population that is nonwhite; NOX=relative pollution potential of Nox (related to amount of tons of Nox emitted per day per square kilometer); SO2=relative pollution potential of SO2

3. Multiple Regression: Steps in Analysis • Preliminaries: Define the question of interest. Review the design of the study. Correct errors in the data. • Explore the data. Use graphical tools, e.g., scatterplot matrix; consider transformations of explanatory variables; fit a tentative model; check for outliers and influential points. • Formulate an inferential model. Word the questions of interest in terms of model parameters.

4. Multiple Regression: Steps in Analysis Continued • Check the Model. (a) Check the model assumptions of linearity, constant variance, normality. (b) If needed, return to step 2 and make changes to the model (such as transformations or adding terms for interaction and curvature); (c) Drop variables from the model that are not of central interest and are not significant. • Infer the answers to the questions of interest using appropriate inferential tools (e.g., confidence intervals, hypothesis tests, prediction intervals). • Presentation: Communicate the results to the intended audience.

5. Scatterplot Matrix • Before fitting a multiple linear regression model, it is good idea to make scatterplots of the response variable versus the explanatory variable. This can suggest transformations of the explanatory variables that need to be done as well as potential outliers and influential points. • Scatterplot matrix in JMP: Click Analyze, Multivariate Methods and Multivariate, and then put the response variable first in the Y, columns box and then the explanatory variables in the Y, columns box.

6. Scatterplot Matrix

7. Crunched Variables • When an X variable is “crunched – meaning that most of its values are crunched together and a few are far apart – there will be influential points. To reduce the effects of crunching, it is a good idea to transform the variable to log of the variable.

8. 2. a) From the scatter plot of MORT vs. NOX we see that NOX values are crunched very tight. A Log transformation of NOX is needed. b) The curvature in MORT vs. SO2 indicates a Log transformation for SO2 may be suitable. After the two transformations we have the following correlations:

10. Influential Points, High Leverage Points, Outliers in Multiple Regression • As in simple linear regression, we identify high leverage and high influence points by checking the leverages and Cook’s distances (Use save columns to save Cook’s D Influence and Hats). • High influence points: Cook’s distance > 1 • High leverage points: Hat greater than (3*(# of explanatory variables + 1))/n is a point with high leverage. These are points for which the explanatory variables are an outlier in a multidimensional sense. • Use same guidelines for dealing with influential observations as in simple linear regression. • Point that has unusual Y given its explanatory variables: point with a residual that is more than 3 RMSEs away from zero.

11. New Orleans has Cook’s Distance greater than 1 – New Orleans may be influential. 3 RMSEs= 108 No points are outliers in residuals

12. Labeling Observations • To have points identified by a certain column, go the column, click Columns and click Label (click Unlabel to Unlabel). • To label a row, go to the row, click rows and click label.

14. Dealing with New Orleans • New Orleans is influential. • New Orleans also has high leverage, hat=0.45>(3*6/60)=0.2. • Thus, it is reasonable to exclude New Orleans from the analysis, report that we excluded New Orleans, and note that our model does not apply to cities with explanatory variables in the range of New Orleans’.

15. Leverage Plots • A “simple regression view” of a multiple regression coefficient. For xj: Residual y (w/o xj) vs. Residual xj (vs the rest of x’s) (both axes are recentered) • Slope in leverage plot: coefficient for that variable in the multiple regression • Distances from the points to the LS line are multiple regression residuals. Distance from point to horizontal line is the residual if the explanatory variable is not included in the model. • Useful to identify (for xj) outliers leverage influential points (Use them the same way as in a simple regression to identify the effect of points for the regression coefficient of a particular variable) • Leverage plots are particularly useful for points which are influential for a particular coefficient in the regression.

16. The enlarged observation New Orleans is an outlier for estimating each coefficient and is highly leveraged for estimating the coefficients of interest on log Nox and log SO2. Since New Orleans is both highly leveraged and an outlier, we expect it to be influential.

17. Analysis without New Orleans

18. Checking the Model

19. Linearity, constant variance and normality assumptions all appear reasonable.

20. Inference About Questions of Interest • Strong evidence that mortality is positively associated with S02 for fixed levels of precipitation, education, nonwhite, NOX. • No strong evidence that mortality is associated with NOX for fixed levels of precipitation, education, nonwhite, S02.

21. Multiple Regression and Causal Inference • Goal: Figure out what the causal effect on mortality would be of decreasing air pollution (and keeping everything else in the world fixed) • Lurking variable: A variable that is associated with both air pollution in a city and mortality in a city. • In order to figure out whether air pollution causes mortality, we want to compare mean mortality among cities with different air pollution levels but the same values of the confounding variables. • If we include all of the lurking variables in the multiple regression model, the coefficient on air pollution represents the change in the mean of mortality that is caused by a one unit increase in air pollution. • If we omit some of the lurking variables, then there is omitted variables bias, i.e., the multiple regression coefficient on air pollution does not measure the causal effect of air pollution.

22. Time Series Data and Autocorrelation • When Y is a variable collected for the same entity (person, state, country) over time, we call the data time series data. • For time series data, we need to consider the independence assumption for the simple and multiple regression model. • Independence Assumption: The residuals are independent of one another. This means that if the residual is positive this year, it needs to be equally likely for the residuals to be positive or negative next year, i.e., there is no autocorrelation. • Positive autocorrelation: Positive residuals are more likely to be followed by positive residuals than by negative residuals. • Negative autocorrelation: Positive residuals are more likely to be followed by negative residuals than by positive residuals.

23. Example: Melanoma Incidence • Is the incidence of melanoma (skin cancer) increasing over time? Is melanoma related to solar radiation? • We address thse questions by looking at melanoma incidence among males from the Connecticut Tumor Registry from 1936 to 1972. Data is in melanoma.JMP

24. Residuals suggest positive autocorrelation.

25. Test of Independence • The Durbin-Watson test is a test of whether the residuals are independent. The null hypothesis is that the residuals are independent and the alternative hypothesis is that the residuals are not independent (either positively or negatively) autocorrelated. • To compute Durbin-Watson test in JMP, after Fit Model, click the red triangle next to Response, click Row Diagnostics and click Durbin-Watson Test. Then click red triangle next to Durbin-Watson to get p-value. • For melanoma data, • Remedy for autocorrelation: Add lagged value of Y to model.