# Cook's distance cut-off value

I have been reading on cook's distance to identify outliers which have high influence on my regression. In Cook's original study he says that a cut-off rate of 1 should be comparable to identify influencers. However, various other studies use $\frac{4}{n}$ or $\frac{4}{n-k-1}$ as a cut-off.

In my study, none of my residuals have a D higher than 1. However, if I use $\frac{4}{n}$ as a cutoff $(\frac{4}{149}= .026)$, then there are various data points which are considered influencers. I decided to test whether removing these data points would make a difference to my general linear regression. All my IVs retained their significance and no obvious change was apparent.

Should I retain all my data points and use the cut-off rate of 1? Or remove them?

• Check Baltagi (2011) Econometrics, 5e. In Chapter 8, section 8.1. He suggests another measure deriving from the Cook's distance, and it, also, checks for distortions/influences from influential obs in the Var-Covar matrix, which you might also need, since your estimators to not change much... Jul 23 '15 at 7:06
• You shouldn't be removing any data on the basis of this diagnostic. Its purpose is to help you think about them and their effects on your analysis.
– whuber
Aug 25 '15 at 12:52