The variance inflation factor can be used to reduce multicollinearity by ________.
A)eliminating variables for a multiple regression model
B)decreasing homoscedasticity
C)evaluating the distribution of residuals
D)testing the null hypothesis that all regression coefficients equal zero

Question

Quizplus · Accepted Answer

The variance inflation factor (VIF) measures the degree of multicollinearity between independent variables in a regression model. A high VIF indicates high multicollinearity, which can make it difficult to interpret the significance of individual independent variables in the model. To reduce multicollinearity, one can eliminate variables that have a high VIF score, which indicates that they have a strong relationship with other variables in the model. Therefore, A is the best choice. B, C, and D are not relevant to reducing multicollinearity.

The Variance Inflation Factor Can Be Used to Reduce Multicollinearity