Calculating Variance Inflation Factor (VIF) for a Predictor

1. **Run a Regression for X1**:

   - Treat X1 as the dependent variable.

   - Use X2 and X3 as the independent variables in this regression.

2. **Calculate R²**:

   - Suppose the R² value from this regression is 0.80. This indicates that X2 and X3 explain 80% of the variation in X1.

3. **Compute VIF**:

   - Use the formula:  

     VIF = 1 / (1 - R²)

   - Substitute the R² value:  

     VIF = 1 / (1 - 0.80) = 1 / 0.20 = 5

So, the VIF for X1 is 5. This means that the variance of X1 is inflated by a factor of 5 due to its correlation with X2 and X3.