Which of the following is not an indicator of multicollinearity?
A)Regression coefficients do differ considerably from values indicated by theory or experience including having incorrect signs.
B)Coefficients of variables believed to be a strong influence have small Student's t statistics indicating that their values do not differ from 0.
C)All the coefficient student t statistics are small,indicating no individual effect.
D)High correlations between individual independent variables.

Question

Quizplus · Accepted Answer

Multicollinearity refers to a situation in statistical modeling where independent variables are highly correlated. This condition does not directly affect the signs of regression coefficients or their alignment with theoretical expectations. Instead, it primarily impacts the precision of the coefficient estimates, making it difficult to determine the individual effect of each independent variable. Options B, C, and D describe symptoms of multicollinearity, such as small t-statistics for coefficients and high correlations between independent variables, which indicate problems in distinguishing their separate impacts on the dependent variable.

Which of the Following Is Not an Indicator of Multicollinearity