The model in Exercise 30 is missing one predictor that we might have expected to see. Engine Displacement is highly correlated 1r = 0.7832 with MSRP, but that variable has not entered the model (and, indeed, would have a P-value of 0.54 if it were added to the model). Here is some evidence to explain why that may be.
a) What term describes the reason Displacement doesn’t contribute to the regression model for MSRP?
b) Find the value of the Variance Inflation Factor for Displacement in the regression on MSRP.

  • CreatedMay 15, 2015
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