Consider the following regression model. log() = Bo + Bi X log(xi) + B2 x log(x2) + € Now consider two conditions: Condi

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Consider The Following Regression Model Log Bo Bi X Log Xi B2 X Log X2 Now Consider Two Conditions Condi 1 (51.42 KiB) Viewed 109 times

Consider the following regression model. log() = Bo + Bi X log(xi) + B2 x log(x2) + € Now consider two conditions: Condition A: log(xi) + log(x2) = 1 for every observation, Condition B: x1 + x2 = 1 for every observation. O Condition B leads to perfect multicollinearity but not condition A. Both Condition A and Condition B lead to perfect multicollinearity. Condition A leads to perfect multicollinearity but not condition B. Neither Condition A nor Condition B lead to perfect multicollinearity.