Question

Which one of the following is true?

Question 17 options:

	When choosing between two regression models to make reliable predictions, we look for the highest R square and all VIF's to be less than 5.
	When choosing between two regression models to make reliable predictions, we look for the highest adjusted R square and all VIF's to be less than 0.05.
	When choosing between two regression models to make reliable predictions, we look for the lowest adjusted R square and all VIF's to be less than 0.05.
	When choosing between two regression models to make reliable predictions, we look for the highest adjusted R square and all VIF's to be less than 5.
	When choosing between two regression models to make reliable predictions, we look for the highest R square and all VIF's to be less than 0.05.

Answer 1

The correct option is D-When choosing between two regression models to make reliable predictions, we look for the highest adjusted R square and all VIF's to be less than 5.

This is because VIF cant be less than 1, and a higher than 5 VIF means very high multicoliniarity.

Adjusted R square means the variation from mean that the model is capturing, adjusted to take account for higher than required variables. The higher the adjusted R squared the better.

Please note that we are talking about adjusted R squared. Normal R squared is not necessarily the higher the better.