Regress Y against X1 X2 and X3 with the following
Regress Y against X1, X2, and X3 with the following sample data:
a. What is the regression equation?
b. Change the first observation of X3 from 8.00 to 9.00. Repeat the regression.
What is the new regression equation?
c. Compare the old and the new regression equations. Does the comparison prove multicollinearity in the data? What is your suggestion for getting rid of the multicollinearity?
d. Looking at the results of the original regression only, could you have figured out that there is a multicollinearity problem? How?
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