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Teacher's Corner

Graphical Interpretation of Variance Inflation Factors

Pages 53-56 | Received 01 Feb 1993, Published online: 27 Feb 2012
 

Abstract

A dynamic graphical display is proposed for uniting partial regression and partial residual plots. This animated display helps students understand multicollinearity and interpret the variance inflation factor. The variance inflation factor is presented as the square of the ratio of t-statistics associated with the partial regression and partial residual plots. Examples using two small data sets illustrate this approach.

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