What are the theoretical consequences of multicollinearity?

      

What are the theoretical consequences of multicollinearity?

  

Answers


lilian
In cases of near or high multicollinearity one is likely to encounter the following consequences,
1. Although blue, the OLS estimators have large variances and covariance, making precise estimation difficult
2. The confidence intervals tend to be much wider leading to the acceptance of zero null hypothesis
lily nekesa answered the question on March 29, 2018 at 12:43


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