Question

Consider the following multiple regression models (a) to (d) below. DFemme = 1 if the individual is a female, and is zero otherwise; DMale is a binary variable which takes on the value one if the individual is male, and is zero otherwise; DMarried is a binary variable which is unity for married individuals and is zero otherwise, and DSingle is (1-DMarried). Regressing weekly earnings (Earn) on a set of explanatory variables.

Required:
Did you experience perfect multicollinearity in the following cases unless?

Answer 1

Answer:

The answer is "Option C"

Explanation:

Please find the complete question in the attachment file.

In this question except for choice c, all are incorrect which can be defined as follows:

• It is inappropriate because when Dfemme and Dmale are paired together, it will core product multicollinearity.
• It's inaccurate because the sum of Dmarried and Dsingle equals 1 but produces ideal multicollinearity.
• It's also inaccurate since Dmarried and Dsingle, as well as Dfemme and Dmale, will all add up to one.