# What is the explanation for a regressor losing statistical significance when a high leverage point is dropped?

I'm currently working on an Econometrics project and I've come to a point where I've dropped a high leverage point as identified by cook's distance and a leverage plot (had observations that were twelve standard deviations away from mean and a nonsensical entry). My regression model before I dropped the high leverage outlier (Sample Size=408) had every regressor be statistically significant at the 95% confidence level. However, after I drop this one observation (New Sample Size=407), one of my variables becomes slightly statistically insignificant (New P=0.051 where Old P=0.045). What is the explanation for this?

• I suggest you to read this paper – user603 Mar 4 '13 at 4:49