Consider the following set of dependent and independent variables. Using technol
ID: 3296610 • Letter: C
Question
Consider the following set of dependent and independent variables. Using technology.check for the presence of multicollinearity. If multicollinearity is present.take the necessary steps to eliminate it. Select the correct choice and.if necessary.fill in the answer boxes to complete your choice. (Type integers or decimals. Round to one decimal place as needed.) A. Eliminate the variable x which has a VIF of No more variables need to be eliminated. B. Eliminate the variable x which has a VIF of Then.eliminate the variable x which has a VIF of C. No variables need to be eliminated.Explanation / Answer
Here we use minitab software to get the multiple regression output:
Regression Analysis: y versus x1, x2, x3
The regression equation is
y = 9.1 + 0.092 x1 - 0.519 x2 + 0.906 x3
Predictor Coef SE Coef T P VIF
Constant 9.14 13.17 0.69 0.514
x1 0.0918 0.3264 0.28 0.788 3.5
x2 -0.5192 0.7125 -0.73 0.494 2.4
x3 0.9061 0.6234 1.45 0.196 5.7
S = 5.82342 R-Sq = 79.1% R-Sq(adj) = 68.6%
Analysis of Variance
Source DF SS MS F P
Regression 3 768.13 256.04 7.55 0.018
Residual Error 6 203.47 33.91
Total 9 971.60
Source DF Seq SS
x1 1 493.57
x2 1 202.92
x3 1 71.65
Unusual Observations
Obs x1 y Fit SE Fit Residual St Resid
9 39.0 28.00 33.03 5.31 -5.03 -2.11R
R denotes an observation with a large standardized residual.
We can say that if the VIF is equal to 1 there is no multicollinearity among factors. If the VIF is greater than 1, the predictors may be moderately correlated. We know that a VIF between 5 and 10 indicates high correlation that may be problematic. For X3 we find that the value of VIF is 5.7
Answer:
A. Eliminate the variable x3 which has a VIF of 5.7. No more variables need to be eliminated.