The problem of collinearity occurs when
A) there is an influential observation in the data set.
B) more than one predictor variable is linearly related to the response variable.
C) at least one predictor var. has a nonlinear relationship with the response variable.
D) none of these
E) two or more predictor variables are linearly related to each other.

Question

Quizplus · Accepted Answer

Collinearity occurs when two or more predictor variables in a regression model are highly linearly related to each other, which can cause issues in estimating the coefficients accurately.

The Problem of Collinearity Occurs When