What does the principle of parsimony suggest?
A)A simple model with fewer independent variables may not produce an effective result.
B)The fewest number of explanatory variables that explain the independent variable need to be included in the model.
C)Good regression models are often based on sound technical analysis.
D)To avoid the problem of multicollinearity,the number of independent variables need to be sufficiently high.

Question

Quizplus · Accepted Answer

The principle of parsimony suggests that the fewest number of explanatory variables that explain the independent variable need to be included in the model. This is also known as Occam's razor or the law of parsimony. It helps to avoid unnecessary complexity in a model and improve its generalizability.

What Does the Principle of Parsimony Suggest