## Definition

In statistics, the variance inflation factor is the ratio of variance in a model with multiple terms, divided by the variance of a model with one term alone. It quantifies the severity of multicollinearity in an ordinary least squares regression analysis. It provides an index that measures how much the variance of an estimated regression coefficient is increased because of collinearity.

### What is 'Variance Inflation Factor'

A measure of the amount of multicollinearity in a set of multiple regression variables. The presence of multicollinearity within the set of independent variables can cause a number of problems in the understanding the significance of individual independent variables in the regression model. Using variance inflation factors helps to identify multicollinearity issues so that the model can be adjusted.

### Explaining 'Variance Inflation Factor'

The variance inflation factor allows a quick measure of how much a variable is contributing to the standard error in the regression. When significant multicollinearity issues exist, the variance inflation factor will be very large for the variables involved. After these variables are identified, there are several approaches that can be used to eliminate or combine collinear variables, resolving the multicollinearity issue.

Model-dependent variance inflation factor cutoff values
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… The collinearity can become worse with designs that have factors at more than two levels, because the measured differences also need to be equally spaced. The variance inflation factor (VIF) is one of the tools used to measure the degree of collinearity present for each factor … Collinearity: revisiting the variance inflation factor in ridge regression
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… The collinearity can become worse with designs that have factors at more than two levels, because the measured differences also need to be equally spaced. The variance inflation factor (VIF) is one of the tools used to measure the degree of collinearity present for each factor … Variance inflation factor and condition number in multiple linear regression
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… The collinearity can become worse with designs that have factors at more than two levels, because the measured differences also need to be equally spaced. The variance inflation factor (VIF) is one of the tools used to measure the degree of collinearity present for each factor … Extracting the variance inflation factor and other multicollinearity diagnostics from typical regression results
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… The collinearity can become worse with designs that have factors at more than two levels, because the measured differences also need to be equally spaced. The variance inflation factor (VIF) is one of the tools used to measure the degree of collinearity present for each factor … Collinearity diagnostic applied in ridge estimation through the variance inflation factor
www.tandfonline.com [PDF]
… The collinearity can become worse with designs that have factors at more than two levels, because the measured differences also need to be equally spaced. The variance inflation factor (VIF) is one of the tools used to measure the degree of collinearity present for each factor … Green purchasing frameworks considering firm size: a multicollinearity analysis using variance inflation factor
www.tandfonline.com [PDF]
… The collinearity can become worse with designs that have factors at more than two levels, because the measured differences also need to be equally spaced. The variance inflation factor (VIF) is one of the tools used to measure the degree of collinearity present for each factor … The corrected vif (cvif)
www.tandfonline.com [PDF]
… The collinearity can become worse with designs that have factors at more than two levels, because the measured differences also need to be equally spaced. The variance inflation factor (VIF) is one of the tools used to measure the degree of collinearity present for each factor … Response surface designs using the generalized variance inflation factors
www.tandfonline.com [PDF]
… The collinearity can become worse with designs that have factors at more than two levels, because the measured differences also need to be equally spaced. The variance inflation factor (VIF) is one of the tools used to measure the degree of collinearity present for each factor …

## Q&A About Variance Inflation Factor

#### What does a large variance inflation factor indicate?

A large variance inflation factor indicates that there are significant multicollinearity issues.

#### What are some approaches for resolving multicollinearity issues?

One approach for resolving these issues is to eliminate or combine collinear variables.

#### What is the purpose of variance inflation factor?

The purpose of variance inflation factor is to identify multicollinearity issues.