Economy, asked by camron9722, 11 months ago

Relationship between correlation coefficient and vif

Answers

Answered by gambhirekta1672
0

Answer:

You are discussing the problem of multicollinearity. This arise from the inclusion of highly correlated independent variables (see Dohoo et al., 1997). Both correlation coefficient and VIF are used to verify multicollinearity. Dohoo et al. (1997) argued that multicollinearity is certain at the 0.9 level of a correlation coefficient or higher (see also discussion by Chen and Rothschild, 2010). On the other hand, the VIF values for included variables should be below 10 (see suggestion of Lin, 2008). If any (correlation coefficient or VIF) critical value is higher than described above, you should remove one of correlated independent variables from your set, or estimate two separated models.

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Answered by vishnumurthyR
0

Answer:

Explanation:

You are discussing the problem of multicollinearity. This arise from the inclusion of highly correlated independent variables (see Dohoo et al., 1997). Both correlation coefficient and VIF are used to verify multicollinearity. Dohoo et al. (1997) argued that multicollinearity is certain at the 0.9 level of a correlation coefficient or higher (see also discussion by Chen and Rothschild, 2010). On the other hand, the VIF values for included variables should be below 10 (see suggestion of Lin, 2008). If any (correlation coefficient or VIF) critical value is higher than described above, you should remove one of correlated independent variables from your set, or estimate two separated models.

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