Collinearity and inflation (2)

In the last exercise, you experimented with removing each of three covariates (sector, exper, and age) from the following model of wages:

model_1 <- lm(wage ~ educ + sector + exper + age, data = CPS85)

For each variation, you measured the effect on inflation and found that leaving out either age or exper brought a signifcant reduction in the variance inflation factor.

In this exercise, you'll build a new model excluding exper, then find the new confidence interval on the effect of educ on wage.

Build model_2 the same as model_1, but leaving out the worst offending covariate, exper.
Find the new confidence interval on the effect of educ on wage for model_2.

Take Hint (-30 XP)

Exercise

Collinearity and inflation (2)

Instructions