Business, 08.04.2020 05:03 ramanpreet

You found a serious multicollinearity problem in your regression model. It turns out that x1 and x2 are highly correlated to each other. Therefore, you need to drop one of these variables. You also found that the correlation of y and x1 is 0.81 and the correlation of y and x2 is 0.75.

Which of the variables will you drop?

a. y

b. x2

c. none of them. dropping a variable is not a remedy for multicollinearity.

d. x1

Answers: 2

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You found a serious multicollinearity problem in your regression model. It turns out that x1 and x2...

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