Focuses on the presence of collinearity

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Reference no: EM132201374

Price determinants for remanufactured electronic products:

A case study on eBay UK This research article focuses on the presence of collinearity amongst explanatory variables such as seller reputation, demand and supply proxies, seller identity, etc. within the remanufacturing process of eBay. Collinearity, in this instance, is said to hinder business operations and so the researchers worked towards eliminating this through multiple linear regression methods. When using regression models as a means of prediction for a company, collinearity can reduce both the statistical and economic results given. Researchers were able to avoid collinearity amongst their explanatory variables through using least ordinary squares, and ridge and mixed regression methods. In doing so, they were able to determine that seller positive reputation, length of warranties, proxies for demand and supply of manufactured products, duration, end of day product listings as well as availability of return policies are key factors in the market determinants of price differentials. Had researchers failed to acknowledge the possibility of collinearity in their research, the findings would have been skewed and would have a negative impact on the company's operations.

Required: What are you think about this? Do you agree or not? Why? Write at least 120 words. Please don't copy from anywhere.

Reference no: EM132201374

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