Question: The following results are from a regression where the dependent variable is COST OF COLLEGE and the independent variables are TYPE OF SCHOOL which is a dummy variable = 0 for public schools and = 1 for private schools, FIRST QUARTILE SAT which is the average score of students in the top quartile of SAT’s, THIRD QUARTILE SAT which is the average score of students in the 3rd quartile, and ROOM AND BOARD which is the cost of room and board at the school. The first set of results

include all the independent variables whereas the second set of results excludes the THIRD QUARTILE SAT variable.

1. Based on these two sets of data, does there appear that multicollinearity is a problem (specifically, does it appear that THIRD QUARTILE SAT is highly collinear with the other independent variables? Explain.

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