Date: Thu, 10 Mar 2011 16:15:29 +0100
Reply-To: Garnik Kazarjan <email@example.com>
Sender: "SPSSX(r) Discussion" <SPSSX-L@LISTSERV.UGA.EDU>
From: Garnik Kazarjan <firstname.lastname@example.org>
Subject: Multicollinearity after centering: interaction variable
I am performing a linear regression analysis with multiple independent variables and some interaction variables. Of course the interaction variables gave multicollinearity problems so I centered the variables around the mean and computed the interaction variables with the centered variables and performed another regression analysis. Unfortunatly the results still showed very very high VIF values indicating multicollinearity. Now I am kind of lost. What should I do to include the interaction terms but not have multicollinearity problems? By the way, for computing the interaction terms I use one dummy variable and one continous variable.
Thanks for any help.