What is one of the most important impacts of VIF on a Regression model, because of which it is recommended to do away with Variables having high VIF?
OPTIONS
- Standard errors of coefficients go high
- Statistical accuracy goes down
- Variance of the Regression model increases
- Regression model is unstable
ANSWER
Variance of the Regression model increases
EXPLANATION
A model having a high VIF will always show slightly higher variance, which is a skewed finding, so THE THIRD OPTION is correct.
