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I am trying to understand the colinearity assumption for linear regression. I have produced this counter example which I can't explain:

Suppose we are modelling the sales of a shop by the sea and on any given day the shop sells two items, buckets and spades. Buckets cost £2 and spades cost £1. The relationship should be:

Y = 2B + S

There is clearly colinearity going on between the variables buckets and spades as they are generally bought together.

Any help?

Daniel Wyatt
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  • Welcome to CV. Linear regression has no "colinearity assumption." Please see https://stats.stackexchange.com/questions/16381 for a discussion of the assumptions. Regardless, what is your question? – whuber Jan 23 '20 at 12:51

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