How does a researcher know when multicollinearity is too high? A) A sample correlation coefficient between two independent variables is greater than ±0.60. B) The variance inflation factor equals zero. C) The variance inflation factor is equal to 1. D) The tolerance factor is high, such as greater than 1.0 E) The R² is less than 20%.

Question

Quizplus · Accepted Answer

A sample correlation coefficient greater than ±0.60 indicates a high degree of correlation between two independent variables, which can indicate multicollinearity. Other factors such as variance inflation factor and tolerance can also be used to detect multicollinearity, but a high correlation coefficient is a good initial signal.

How Does a Researcher Know When Multicollinearity Is Too High