If adding an independent variable results in a reduction in the adjusted R2, we have evidence that the new variable might not be contributing enough explanation of the dependent variable to remain in the model.

Question

Quizplus · Accepted Answer

The adjusted R2 adjusts the R2 value for the number of variables in the model, penalizing for adding variables that do not improve the model's explanatory power. A reduction in adjusted R2 upon adding a new variable suggests that the variable may not be contributing significantly to explaining the variation in the dependent variable.

If Adding an Independent Variable Results in a Reduction in the Adjusted