Multicollinearity
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1
multicollinearity definition
when several independent variables in a model are correlates
2
when we have multicollinearity what value can we not trust?
the coefficients of independent variables in linear regression
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what do we use to measure multicollinearity?
Variance inflation factors (VIF)
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what values does the VIF need to be in order to have multicollinearity
VIF > 4 or VIF < 0.25
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what values does the VIF need to be in order to not have multicollinearity
0.25 < VIF < 4
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what does the Gauss-Markov Theorem state?
the coefficients of independent variables from the ordinary least square method with the least variance are the most unbiased
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what shows unbiasedness of the OLS estimator?
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what shows the smallest variance of the OLS estimator
9
what is the coefficient of ind vars estimated from the OLS Method?
The best linear unbiased estimators (BLUE)