Comparing the Principal Regression Analysis Method with Ridge Regression Analysis in Overcoming Multicollinearity on Human Development Index (HDI) Data in Regency/City of East Java in 2018

Abstract

East Java Province is one of the densely populated provinces. The population density in the province of East Java does not hamper the welfare of its people. The welfare of the people in the province of East Java can be seen through the Human Development Index (HDI), which includes elements of life expectancy, education, and economy. According to the Central Statistics Agency (BPS) of East Java, the HDI level from 2017 to 2018 has increased, but this data experiences a case of multicollinearity. Researchers compared the Principal Regression Analysis method with Ridge Regression Analysis in overcoming the multicollinearity. The conditions taken are methods that have a small MSE value and a large R 2 value. Based on the results and discussion, the Main Component Regression Analysis method has an MSE value of 2.51 and an R 2 value of 91.0%, the Ridge Regression Analysis Method has an MSE value of 0,00071 and an R 2 of 97.7%. The provisions obtained are the value of MSE Regression Ridge is smaller than the value of MSE Regression Main Components and the value of R 2 Regression Ridge is greater than the value of R 2 Main Components. So, the best method in overcoming the multicollinearity problem in the Regency / City Human Development Index (HDI) data in East Java in 2018 is the Ridge Regression Analysis method.