In stepwise regression procedure, if two independent variables are highly correlated, then:
A) both variables will enter the equation
B) only one variable will enter the equation
C) neither variable will enter the equation
D) the regression is equal to zero
E) Not enough information is given to answer this question.

Question

Quizplus · Accepted Answer

In stepwise regression procedure, highly correlated variables are likely to compete for entry into the model, and only one of them may be selected. This is because including both of them in the model would lead to multicollinearity, which can reduce the accuracy and interpretability of the results. Therefore, only one of the highly correlated variables is likely to enter the model, and the other may be excluded. The exact variable that enters the model depends on the stepwise regression algorithm used and its conditions for variable selection.

In Stepwise Regression Procedure, If Two Independent Variables Are Highly