1. ## Understanding pairwise correlation

Maybe it is the current time, but I have some difficulties understanding what my tutor means (and he is gone on vacation so I can't ask).

In my regression, I have six variables that reflect culture. Other studies used maybe two or three at most of these variables. Therefore he said: that these few variables can also reflect the other culture aspects that are not accounted for and that I can back this up with pairwise correlation & if these are positive run the regression only with one variable.

so he wants me to a pairwise correlation between my six variables and if there is a positive correlation between two, run them separately in a regression.

Other question: what if there is a negative correlation what does that mean then? why only positive correlation?

2. ## Re: Understanding pairwise correlation

If you are referring to correlation between the explanatory variables, your tutor is probably referring to multicollinearity. This can occur anytime 2 or more of the predictor variables are correlated (positive OR negative). Testing the correlations prior to regression can help identify a POTENTIAL issue, but checking the Variance Inflation Factors (VIFs) in your regression model is more typically used. A VIF > 5 indicates that multicollinearity is present, and should be remedied. Dropping one of the correlated variables is one way of dealing with the issue.

3. ## Re: Understanding pairwise correlation

Originally Posted by Miner
If you are referring to correlation between the explanatory variables, your tutor is probably referring to multicollinearity. This can occur anytime 2 or more of the predictor variables are correlated (positive OR negative). Testing the correlations prior to regression can help identify a POTENTIAL issue, but checking the Variance Inflation Factors (VIFs) in your regression model is more typically used. A VIF > 5 indicates that multicollinearity is present, and should be remedied. Dropping one of the correlated variables is one way of dealing with the issue.
The thing is that he told me this AFTER I run the regression with all predictor variables and reported the VIF (which are all between 1 and 2). He has me very confused on what he wants/his logic

5. ## Re: Understanding pairwise correlation

Originally Posted by Miner
he did say that the VIF are all ok, before mentioning what I said in my first post...

6. ## Re: Understanding pairwise correlation

Originally Posted by Miner
If you are referring to correlation between the explanatory variables, your tutor is probably referring to multicollinearity. This can occur anytime 2 or more of the predictor variables are correlated (positive OR negative). Testing the correlations prior to regression can help identify a POTENTIAL issue, but checking the Variance Inflation Factors (VIFs) in your regression model is more typically used. A VIF > 5 indicates that multicollinearity is present, and should be remedied. Dropping one of the correlated variables is one way of dealing with the issue.
I've also heard a VIF of around 10 is a red flag, but of course, multicollinearity issues can present at much lower VIFs. I would caution that "the correct remedy is to drop an independent variable from the regression." If your goal is prediction then MC is largely irrelevant as it has no negative impact on the model fit and prediction, therefore you don't need to drop a variable (and doing so might actually reduce the predictive ability of the model). However, if the goal is beta inferences and interpretations, then you do need to mitigate the effects of multicollinearity. Dropping independent variables until there is little evidence of an issue is one possible solution, but other methods, like centering, can sometimes remedy the issue.

7. ## The Following 2 Users Say Thank You to ondansetron For This Useful Post:

hlsmith (05-03-2017), Jazz3 (05-03-2017)

8. ## Re: Understanding pairwise correlation

Originally Posted by ondansetron
I would caution that "the correct remedy is to drop an independent variable from the regression."
Originally Posted by Miner
A VIF > 5 indicates that multicollinearity is present, and should be remedied. Dropping one of the correlated variables is one way of dealing with the issue.
I did not say "the correct remedy is to drop an independent variable from the regression." I said dropping is one way of dealing with the issue.

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