Application of New Ridge Regression Methods to a Study of Bell System Scale Economies

Abstract

We suggest a new horizontal scaling for the ridge trace, some new techniques for monitoring ridge solutions including an index of stability of relative magnitudes (ISRM) and numerical largeness of more significant (NLMS) regression coefficients. A method of curtailing the tending of ridge regression coefficients toward zero is also presented. Two examples illustrate these methods and estimate Bell System's scale economies to be large.