Local influence in measurement error models with ridge estimate

Ridge estimate has been suggested as an alternative to the maximum likelihood estimate in the presence of collinearity among the elements of unobservable values in measurement error models. This paper studies the local influence of minor perturbations on the ridge estimate in the measurement error model. The diagnostics under the perturbation of variance and explanatory variables are considered. The generalized local influence and Cook’s statistic analogous to those given in ordinary linear regression are derived. An example of the Egyptian pottery data is analyzed for illustration. © 2005 Elsevier B.V. All rights reserved.