1. In general, what should you do if you think multicolliearity is a problem?

1.     In general, what should you do if you think multicolliearity is a problem?

a.     After checking each X variable, include all of them in the final regression

b.     Check the correlation coefficients to make sure they are less than .3 across the x variables

c.     Throw out the X variables and see if the adj R2 has increased

d.     Throw out the X variables with VIF>8, one at time and make sure that P-values have decreased , choose the model with the highest adj. R2