Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/198819 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7459
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Multicollinearity, especially in combination with errors-in-variables, can increase the likelihood of a Type-I error by inflating the value of the estimated coefficients by more than it magnifies their standard errors, thereby increasing the likelihood of obtaining statistically significant results. This anomalous result may be due to an interaction effect between errors-in-variables and multicollinearity.
Subjects: 
multicollinearity
Type I error
errors-in-variables
JEL: 
C01
Document Type: 
Working Paper
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