In regression analysis,the existence of a high degree of intercorrelation among some or all of the explanatory variables in the regression equation constitutes:
A) autocorrelation
B) a simultaneous equation relationship
C) nonlinearities
D) heteroscedasticity
E) multicollinearity

Question

Quizplus · Accepted Answer

Multicollinearity occurs when there is a high degree of intercorrelation among some or all of the explanatory variables in a regression equation. This means that the independent variables are not independent from each other and can lead to unreliable coefficient estimates and difficulty in interpreting the results.

In Regression Analysis,the Existence of a High Degree of Intercorrelation