Could someone help me interpret the alias function output for testing for multicollinearity in a multiple regression model. I know some predictor variables in my model are highl
Nonzero entries in the "complete" matrix show that those terms are linearly dependent on UseMonthly
. This means they're highly correlated, but terms can be highly correlated without being linearly dependent.
If your purpose is to identify and remove correlated variables, you should remove UseMonthly
, but you'll probably also want to remove others as well. A common way to identify variables which can be problematic with respect to multicollinearity is to search for large variance inflation factors (calculated by e.g. car::vif
).