Use the data set below to answer the following questions Com

Use the data set below to answer the following questions. Complete parts a through d Calculate the variance inflation factor (VIF) for each of the independent variables. Indicate if multicollinearity exists between the two independent variables. (Round to one decimal place as needed.) There sufficient evidence of multicollinearty between the two independent variables.

Solution

R square for (x1,x2) = R square for (x2,x1)

Therefore, VIF = 1/(1+R^2)

= 0.8

Since VIF < 4. There is not sufficient evidence of multicollinerarity between independent variables.