Textbook theory predicts that t-ratios decline towards zero in regressions when there is increasing collinearity … coefficients increase greatly with more collinearity. The purposes of this article are 1) to illustrate this bias and explain why … increasing collinearity. False negatives are possible, but not likely. The test is confirmed with algebraic examples and …

Textbook theory predicts that t-ratios decline towards zero in regressions when there is increasing collinearity … coefficients increase greatly with more collinearity. The purposes of this article are 1) to illustrate this bias and explain why … increasing collinearity. False negatives are possible, but not likely. The test is confirmed with algebraic examples and …

regressions, estimated parameters values and some statistical tests are influenced by collinearity between explanatory variables …. In fact, collinearity acts as a noise which distorts the signal (proper parameter values). This influence is emphasized … by the coefficients of alignment to collinearity hazard values. The respective coefficients have some similarities with …