19. Notebook + Quiz: Multicollinearity & VIFs

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Based on the scatterplot matrix in the first question, select all the below statements that are true.

SOLUTION:
  • It appears that the predictor variables are correlated with one another.
  • The variables that appear to be most correlated are the number of bedrooms and bathrooms.

Select all that are true about the coefficients in your multiple linear regression model.

SOLUTION:
  • As the number of bathrooms increases, we predict the price to increase.
  • As the area of the home increases, we predict the price to increase.

Which one of the statements below reflects the action that should be taken based on the VIFs?

SOLUTION: We should remove either bedrooms or bathrooms, because they both have VIFs greater than 10.

Mark all of the statements below that are true with regard to your final results.

SOLUTION:
  • All VIFs are now below 10.
  • All of the coefficients are now positive, as we would expect.
  • To three digits the Rsquared value stayed the same, suggesting we didn't really need both bedrooms and bathrooms in the model.

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