How much Multicollinearity is too much?
In respect to this, what is the limit for VIF values?
Various recommendations for acceptable levels of VIF have been published in the literature. Perhaps most commonly, a value of 10 has bee recommended as the maximum level of VIF (e.g., Hair, Anderson, Tatham, & Black, 1995; Kennedy, 1992; Marquardt, 1970; Neter, Wasserman, & Kutner, 1989).
Secondly, how much correlation is high? High degree: If the coefficient value lies between ± 0.50 and ± 1, then it is said to be a strong correlation. Moderate degree: If the value lies between ± 0.30 and ± 0.49, then it is said to be a medium correlation. Low degree: When the value lies below + . 29, then it is said to be a small correlation.
Also to know is, what is considered high Multicollinearity?
Multicollinearity occurs when two or more predictors in the model are correlated and provide redundant information about the response. If VIF value exceeding 4.0, or by tol- erance less than 0.2 then there is a problem with multicollinearity (Hair et al., 2010).
How do you calculate Multicollinearity?
Multicollinearity can also be detected with the help of tolerance and its reciprocal, called variance inflation factor (VIF). If the value of tolerance is less than 0.2 or 0.1 and, simultaneously, the value of VIF 10 and above, then the multicollinearity is problematic.