On doing a Multiple Linear Regression Model, the VIF Value is 2.8. What should the Black Belt infer?

OPTIONS

• Since VIF > 0, the variables are collinear
• Since VIF < 5, variables being collinear is not much of an issue
• High degree of collinearity amongst variables
• None of the above

ANSWER

Since VIF < 5, variables being collinear is not much of an issue

EXPLANATION

If VIF < 5, it only shows weak to moderate collinearity, which shouldn’t be much of a concern, so THE SECOND OPTION is correct.