What are multicollinearity and its implications in regression analysis?
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Multicollinearity occurs when two or more independent variables in a regression model are highly correlated. This can:
Make it difficult to determine the individual effect of each independent variable on the dependent variable.
Lead to unstable coefficient estimates
Multicollinearity occurs when two or more independent variables in a regression model are highly correlated. This can:
- Make it difficult to determine the individual effect of each independent variable on the dependent variable.
- Lead to unstable coefficient estimates.