A New Ridge-Type Estimator for the Linear Regression Model: Simulations and Applications
A New Ridge-Type Estimator for the Linear Regression Model: Simulations and Applications
The ridge regression-type (Hoerl and Kennard, 1970) and Liu-type (Liu, 1993) estimators are consistently attractive shrinkage methods to reduce the effects of multicollinearity for both linear and nonlinear regression models. This paper proposes a new estimator to solve the multicollinearity problem for the linear regression model. Theory and simulation results …