Biased Estimators
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True or false. High collinearity among explanatory variables leads to biased point estimates, since high collinearity increases the variance of the estimates. Explain what this means and why or why not?
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This solution assists with a true or false question about biased estimators.
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Collinearity, or multicollinearity, occurs when two or more explanatory variables in a multiple regression model are correlated. When these independent variables are highly correlated, it could lead the false conclusion that there is no linear relationship ...
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