Leverage Values

In regression, leverage values refer to the diagonal elements of the hat matrix (X(X'X)-1X'). A given diagonal element (h(ii)) represents the distance between X values for the ith observation and the means of all X values. These values indicate whether X values for a given observation are outlying. The diagonal element is referred to as the leverage. A large leverage value indicates that the ith observation is distant from the center of the X observations (Neter, et al, 1985).