Multicollinearity between independent variables is serious if the mean variance inflation factor is:
A)Substantially less than 1.
B)Substantially greater than 1.
C)Between -1 and +1.
D)Less than .5.
E)Substantially less than zero.

Question

Quizplus · Accepted Answer

The mean variance inflation factor measures the extent of multicollinearity between independent variables. A value substantially greater than 1 indicates a high degree of multicollinearity between the independent variables, which can cause problems in interpreting the regression coefficients and in making reliable predictions. Therefore, option B is the correct answer.

Multicollinearity Between Independent Variables Is Serious If the Mean Variance