The Variance Inflationary Factor (VIF)measures the
A) standard deviation of the slope.
B) contribution of each X variable with the Y variable after all other X variables are included in the model.
C) correlation of the X variables with the Y variable.
D) correlation of the X variables with each other.

Question

Quizplus · Accepted Answer

VIF measures the correlation between each explanatory variable with all the other explanatory variables in the model. It helps to identify if there is high collinearity between the explanatory variables, which can result in unstable estimates of the regression coefficients. A VIF value greater than 5 or 10 indicates high collinearity, indicating that the variance of the estimated regression coefficients is inflated due to the correlation between explanatory variables. Therefore, option D is the correct choice.