Author Question: What problems can occur when the independent variables are correlated with each other? What will ... (Read 30 times)

jilianpiloj · **on:** Jun 24, 2018

What problems can occur when the independent variables are correlated with each other?

What will be an ideal response?

Question 2

Which of the following is the calculated p-value for Blocks? (Hint: Use Excel)

A) 0.52
B) 0.93
C) 0.20
D) 0.72

fraziera112 · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

Correlations between independent variables can have a major influence on the estimated coefficients. Thus, if one has a choice, highly correlated independent variables should be avoided. But in many cases we do not have that choice. Regression coefficient estimates are always conditional on the other predictor variables in the model. Thus proper model specificationchoice of predictor variablesis very important. Model specification requires an understanding of the problem context and appropriate theory implementation.

Answer to Question 2

A