To measure multicollinearity, you can examine the correlation structure of the predictor variables. You can also examine the variance inflation factors (VIF). The VIFs measure how much the variance of an estimated regression coefficient increases if your predictors are correlated. If all of the VIFs are 1, there is no multicollinearity, but if some VIFs are greater than 1, the predictors are correlated. When a VIF is > 5, the regression coefficient for that term is not estimated well. If the correlation of a predictor with other predictors is nearly perfect, Minitab displays a message that the term cannot be estimated. The VIF values for terms that cannot be estimated typically exceed one billion.
Multicollinearity does not affect the goodness of fit and the goodness of prediction. The coefficients (linear discriminant function) cannot be interpreted reliably, but the fitted (classified) values are not affected.
Multicollinearity has the same effect in discriminant analysis as in regression.
For example, a toy manufacturer wants to predict customer satisfaction and includes "strength" and "lack of breakage" as predictor variables in the regression model. The investigator determines that these two variables are strongly negatively correlated and have a VIF greater than 5. At this point, the investigator could try removing either variable. The investigator could also use Partial Least Squares or Principal Components Analysis to use these related variables to create a "durability" component.