The Effects of Multicollinearity in Ordinary Least Squares (OLS) Estimation
Abstract & Details
Research Area
Statistics
Keywords
OLS Estimation
Multicollinearity
Regression Coefficients
Abstract
The explanatory variables are not perfectly linearly correlated is one of the crucial assumption of Ordinary Least Squares (OLS) Estimation. So this paper explains the stability of OLS estimation when the explanatory variables are perfectly linearly correlated. This paper shows, If the correlation between the particular explanatory variables is perfect (r_(x_i x_j )=1), then the estimates of the regression coefficients are undesirable and the standard deviation of the regression coefficients are infinitely large.
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Author Information
| # | Name | Institute / Affiliation |
|---|---|---|
| 1 | Weeraratne N.C. | Sabaragamuwa University of Sri Lanka |
How to Cite
Use the following formats to cite this article in your research.
APA Style
N.C., Weeraratne (2016). The Effects of Multicollinearity in Ordinary Least Squares (OLS) Estimation. International Journal of Advance Research and Innovative Ideas In Education, 2(4), 1002-1008.
MLA Style
N.C., Weeraratne. "The Effects of Multicollinearity in Ordinary Least Squares (OLS) Estimation." International Journal of Advance Research and Innovative Ideas In Education, vol. 2, no. 4, 2016, pp. 1002-1008.
IEEE Style
Weeraratne N.C., "The Effects of Multicollinearity in Ordinary Least Squares (OLS) Estimation," International Journal of Advance Research and Innovative Ideas In Education, vol. 2, no. 4, pp. 1002-1008, 2016.
Vancouver Style
N.C. Weeraratne. The Effects of Multicollinearity in Ordinary Least Squares (OLS) Estimation. International Journal of Advance Research and Innovative Ideas In Education. 2016;2(4):1002-1008.
Harvard Style
N.C., Weeraratne (2016) 'The Effects of Multicollinearity in Ordinary Least Squares (OLS) Estimation', International Journal of Advance Research and Innovative Ideas In Education, 2(4), pp. 1002-1008.
Chicago Style
N.C., Weeraratne. "The Effects of Multicollinearity in Ordinary Least Squares (OLS) Estimation." International Journal of Advance Research and Innovative Ideas In Education 2, no. 4 (2016): 1002-1008.
Turabian Style
N.C., Weeraratne. "The Effects of Multicollinearity in Ordinary Least Squares (OLS) Estimation." International Journal of Advance Research and Innovative Ideas In Education 2, no. 4 (2016): 1002-1008.