Mathematics, 05.05.2021 05:00 2022maldonadoleonel
The following estimated regression equation was developed for a model involving two independent variables.
Ε·β =40.7+8.63x1β+2.71x^2β
After x2 was dropped from the model, the least squares method was used to obtain an estimated regression equation involving only x1 as an independent variable.
Ε·= 42.0+9.01x1
β
Required:
a. Give an interpretation of the coefficient of x1 in both models.
b. Could multicollinearity explain why the coefficient of x1 differs in the two models? If so, how?
Answers: 2
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