Question 11.80

11.80 Assessing collinearity in the movie revenue model.

CASE 11.2 Many software packages will calculate VIF values for each explanatory variable. In this exercise, calculate the VIF values using several multiple regressions, and then use them to see if there is collinearity among the movie explanatory variables.

movies

  1. Use statistical software to estimate the multiple regression model for predicting Budget based on Opening and Theaters. Calculate the VIF value for Budget using from this model and the formula

  2. Use statistical software to estimate the multiple regression model for predicting Opening based on Budget and Theaters. Calculate the VIF value for Opening using from this model and the formula from part (a).
  3. Use statistical software to estimate the multiple regression model for predicting Theaters based on Budget and Opening. Calculate the VIF value for Theaters using from this model and the formula from part (a).
  4. Do any of the calculated VIF values indicate severe collinearity among the explanatory variables? Explain your response.