# If a group of independent variables are not

• Notes
• 18
• 96% (57) 55 out of 57 people found this document helpful

This preview shows page 8 - 11 out of 18 pages.

18. If a group of independent variables are not significant individually, but are significant as a group at a specified level of significance, this is most likely due to a) autocorrelation. b) the presence of dummy variables. c) the absence of dummy variables. d) collinearity. ANSWER: d TYPE: MC DIFFICULTY: Easy KEYWORDS: collinearity, assumption, properties

Subscribe to view the full document.

Multiple Regression Model Building 205 19. As a project for his business statistics class, a student examined the factors that determined parking meter rates throughout the campus area. Data were collected for the price per hour of parking, blocks to the quadrangle, and one of the three jurisdictions: on campus, in downtown and off campus, or outside of downtown and off campus. The population regression model hypothesized is 0 1 1 2 2 3 3 i i i i i Y x x x β β β β ε = + + + + where Y is the meter price x 1 is the number of blocks to the quad x 2 is a dummy variable that takes the value 1 if the meter is located in downtown and off campus and the value 0 otherwise x 3 is a dummy variable that takes the value 1 if the meter is located outside of downtown and off campus, and the value 0 otherwise Suppose that whether the meter is located on campus is an important explanatory factor. Why should the variable that depicts this attribute not be included in the model? 20. True or False: The Variance Inflationary Factor (VIF) measures the correlation of the X variables with the Y variable. ANSWER: False TYPE: TF DIFFICULTY: Moderate KEYWORDS: variance inflationary factor, collinearity 21. True or False: Collinearity is present when there is a high degree of correlation between independent variables. ANSWER: True TYPE: TF DIFFICULTY: Easy KEYWORDS: collinearity 22. True or False: Collinearity is present when there is a high degree of correlation between the dependent variable and any of the independent variables. ANSWER: False TYPE: TF DIFFICULTY: Moderate KEYWORDS: collinearity, properties
206 Multiple Regression Model Building 23. True or False: A high value of R 2 significantly above 0 in multiple regression, accompanied by insignificant t -values on all parameter estimates, very often indicates a high correlation between independent variables in the model. ANSWER: True TYPE: TF DIFFICULTY: Difficult KEYWORDS: collinearity, properties 24. True or False: One of the consequences of collinearity in multiple regression is inflated standard errors in some or all of the estimated slope coefficients. ANSWER: True TYPE: TF DIFFICULTY: Easy KEYWORDS: collinearity, properties 25. True or False: One of the consequences of collinearity in multiple regression is biased estimates on the slope coefficients.

Subscribe to view the full document.

{[ snackBarMessage ]}

###### "Before using Course Hero my grade was at 78%. By the end of the semester my grade was at 90%. I could not have done it without all the class material I found."
— Christopher R., University of Rhode Island '15, Course Hero Intern

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern