1. The relatively greater influence of observations farther from the center of the X-space can be illustrated using simple linear regression. Ex 1 .) Assume a perturbation of δ = 1 on each Y i in...

1. The relatively greater influence of observations farther from the center of the X-space can be illustrated using simple linear regression. Ex

₁.) Assume a perturbation of δ = 1 on each Y_i
in turn. Compute the amount β₁
would change if the values of X are 0, 1, 2, and 9. Compute P = X(X’X)−1X for this example. Which observation has the largest diagonal element of P?

2. Find an example in your field for which you might expect collinearity to be a problem. Explain why you expect there to be collinearity.