Appendix

by Emir Izat bin Abdul Rashid

July 21, 2022

1 Measuring Health Disparity for Groups

For the purpose of the study, we are looking for a measure that capture inter-group vaccine hesi-

tancy/uptake within a district. Index of disparity is a suitable choice to achieve this purpose.

Definition 1.1. The index of disparity, ID, for n number of groups for a given district is given as

follows

P 
n−1 |ri −rrp |
i=1 n−1
ID = [1]
rrp

where ri is the rate of vaccination for the ith group, rrp is the rate of vaccination for the reference

group (the best performing group in a district).

The drawback of the measure above is that it does not take into account the relative size of

the group with respect to the whole population. To remedy this problem, I am proposing a new

measure, weighted index of disparity (IDw ) to account for population size.

Definition 1.2. The weighted index of disparity IDw for a given population of group i from the

collection of n groups {1, . . . , i, . . . , n} is

 P 
n−1 |ri −rrp | pi
i=1 n−1 p1 +···+pn
IDw =  
rrp

given that pj is the population size for the j-th group.

Still, both weighted and non-weighted index of disparity is sensitive to inter-group disparity: but

it may not capture intra-group disparity as well. To capture institutionally-established categories

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such as ethnicity, gender, income brackets, and others, the index of disparity is a suitable measure

for redistributive policy goals.

2 The Theory of Linear Models

2.1 What is a Linear Model?

Definition 2.1. For an observation i, if we assume that the response variable yi and the explanatory

variables x1 , x2 , . . . , xp are linearly related

yi = β0 + β1 xi1 + · · · + βp xip + ei

Or more concisely,

Y = Xβ + e

Given that X is the design matrix, assuming that E(ei ) = 0, V ar(ei ) = σ 2 for all i, and

Cov(ei , ej ) = 0 for all i 6= j

Theorem 2.1. The least square estimate for the parameter β in a linear model is

β̂ = (X T X)−1 X T Y

given that (X T X)−1 is invertible (it usually is unless you use two exactly dependent variables).

Proof. The proof is left as an exercise to the reader.

2.2 Why is Linear Model Attractive?

The reason for the popularity of linear models is due to the following theorem also known as the

Gauss-Markov theorem.

Theorem 2.2. For any linear, unbiased estimator, the least square estimate has the smallest

sampling variance (i.e. the most optimal)

Proof. The proof is left as an exercise to the reader.

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 Although one could get a non-linear or biased estimator which can fit a model better, we usually

stick with OLS to remove the overfitting problem.

2.3 Variable Selection

This is the most crucial part of the OLS, which is essentially a collection of techniques to pick the

”best” model out of many potential models out there.

There are two distinct techniques which we use to do variable selection; the first is stepwise

regression and the second is criteria-based selection.

Here are the range of the different variable selection techniques commonly used:

1. Backward elimination (stepwise)

2. Forward selection (stepwise)

3. Adjusted R2 (criteria)

4. Akaike Information Criterion (criteria)

5. Bayes Information Criterion (criteria)

6. Mallow’s Cp (criteria)

7. Cross-validation (criteria)

All the techniques above will generally yield different models. Cross-validation is the most

computationally expensive technique among these but a favorite among many practitioners. We

can select the best models chosen by 1-6 and compare them using cross-validation.

2.4 Regression Diagnostics

We need to ensure that our model is robust by checking all the assumptions in definition 2.1 and

removing outliers. Usually the OLS library in R can correct most issues.

2.5 Statistical Significance

Last but not least, we need to conduct hypothesis testing to ensure that our observations are

statistically significant. Statistical significance is an important step towards establishing some

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grounds for our hypothesis – the first step towards showing causality. The more popular tests

include the F-test and t-tests which are equivalent forms of hypothesis testing for model significance

but requires the assumption that our observations are normally distributed. Another interesting

test is the permutation test, which is also widely used because they involve no assumptions for

normality in the OLS. We usually test our model against an empty model (we essentially argue

that our hypothesized parameters fit the observation better than no parameters at all).

References

[1] Jeffrey N Pearcy and Kenneth G Keppel. A summary measure of health disparity. Public health

reports, 2016.