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    Question

    VIF test is done for which of the following?

    A Heteroscedasticity Correct Answer Incorrect Answer
    B Autocorrelation Correct Answer Incorrect Answer
    C Multicollinearity Correct Answer Incorrect Answer
    D Specification Bias Correct Answer Incorrect Answer

    Solution

    VIF (Variance Inflation Factor) test quantifies the severity of multicollinearity in an ordinary least squares regression analysis. It provides an index that measures how much the variance (the square of the estimate's standard deviation) of an estimated regression coefficient is increased because of collinearity.

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