In an ideal regression model, we want our tolerance and VIF to be…
A) tolerance greater than 2 and VIF less than 10.
B) tolerance greater than 0.2 and VIF less than 10.
C) tolerance less than 2 and VIF greater than 10.
D) tolerance less than 0.2 and VIF greater than 10.

Question

Quizplus · Accepted Answer

Tolerance values greater than 0.2 and VIF values less than 10 are generally considered acceptable thresholds indicating that multicollinearity is not a concern in the regression model. Tolerance is the inverse of VIF, so as tolerance increases, VIF decreases, indicating lower multicollinearity.

In an Ideal Regression Model, We Want Our Tolerance and VIF