In the case of perfect multicollinearity, OLS is unable to estimate the slope coefficients of the variables involved. Assume that you have included both X₁ and X₂ as explanatory variables, and that X₂ = X $\begin{array} { l } 2 \ 1 \end{array}$ , so that there is an exact relationship between two explanatory variables. Does this pose a problem for estimation?

Question

Quizplus · Accepted Answer

The Answer of In the case of perfect multicollinearity, OLS is unable to estimate the slope coefficients of the variables involved. Assume that you have included both X₁ and X₂ as explanatory variables, and that X₂ = X $\begin{array} { l } 2 \ 1 \end{array}$ , so that there is an exact relationship between two explanatory variables. Does this pose a problem for estimation?

In the Case of Perfect Multicollinearity, OLS Is Unable to Estimate