Use principal components regression to obtain parameter estimates for the regression model analyzed in Problem 5.7. A. What is the condition index of the correlation matrix? B. How many principal...

Use principal components regression to obtain parameter estimates for the regression model analyzed in Problem 5.7. A. What is the condition index of the correlation matrix? B. How many principal components are you justified in omitting? Report the regression equation. C. Is there a better way to deal with the multicollinearity in these data?

Problem 5.7

Here are the eigenvalues of a correlation matrix of a set of independent variables: λ1 = 4.231, λ2 = 1.279, λ3 = .395, λ4 = .084, λ5 = .009, and λ6 = .002. A. How many independent variables are there? B. Calculate the condition index of this matrix. C. Is there a problem with multicollinearity?