As I draft this, I plan to do four things in this post.
- Summarize the methods I’ve used to analyze multicollinearity.
- Suggest that multicollinearity is a continuum with no clear-cut boundaries.
- Summarize the conventional wisdom on its diagnosis and treatment.
- Flag significant points made in my posts.
Let me say up front that there is one more thing I know of that I want to learn about multicollinearity – but it won’t happen this time around. I would like to know what economists did to get around the multicollinearity involved in estimating production functions, such as the Cobb-Douglas.
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