Question

Is this statement true or false? Adjusted R-squared is more accurate for models with multiple independent variables because R-squared tends to underestimate the effect of additional variables.

Answer 1

Answer:

False

Explanation:

The adjusted R square value is always less than or equal to the R square value. This is because the R square value overestimates the variance explained by the independent variables for additional variables.

This means the R square value increases every time a variable is added in the model while the adjusted R square value increases only if the additional variable is significant in the model.

hence the correct statement should be Adjusted R-squared is more accurate for models with multiple independent variables because R-squared tends to overestimate the effect of additional variables.