Predictive Efficiency of Ridge Regression Estimator

Abstract

In this article, we have considered the problem of prediction within and outside the sample for actual and average values of the study variables in case of ordinary least squares and ridge regression estimators. Finally, the performance properties of the estimators are analyzed.

Keywords: Linear Regression Model, Ridge Regression Estimator, least-squares Predictor, Ridge Regression Predictor, Prediction within and outside Sample, Prior Non-sample Information.