The way to avoid multicollinearity is to use warning statistics issued by most statistical analysis programs to identify this problem.One commonly used method is the:
A)Deflation factor(DF).
B)Regression factor(RF).
C)Variance inflation factor(VIF).
D)Standard variance factor(SVF).

Question

Quizplus · Accepted Answer

The variance inflation factor (VIF) is a measure of multicollinearity, which indicates how much the variance of the estimated regression coefficient of a particular independent variable is increased due to correlation with other independent variables in the model. A high VIF suggests that multicollinearity may be present and the variable may need to be removed from the model to avoid bias or instability in the regression coefficients. Therefore, VIF is the best choice to avoid multicollinearity.

The Way to Avoid Multicollinearity Is to Use Warning Statistics