Question

Not all variables retained in a regression model are required to be significant.
True or False

Answer 1

True

Explanation:

True.

Not all variables retained in a regression model need to be statistically significant at a given level of significance (e.g., 5% level). The inclusion of variables in a regression model can be based on theoretical or practical considerations, and not solely on statistical significance. Moreover, some variables may have an important effect on the dependent variable even if they are not statistically significant in the model. However, it is important to assess the overall fit and predictive power of the model, and to consider alternative models and variable transformations if necessary.