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Author Question: Explain what is meant by heteroscedasticity. What effects does heteroscedasticity have on the ... (Read 73 times)

kodithompson

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on: Jun 24, 2018
Explain what is meant by heteroscedasticity. What effects does heteroscedasticity have on the results of a regression?
 
  What will be an ideal response?

Question 2

All of the following are true about the sampling distribution of the mean except ________.
 
  A) the population standard deviation can be determined when a large sample size is used
  B) the standard deviation of this distribution is called the standard error of the mean
  C) when larger sample sizes are used for this distribution, the sampling error is less
  D) this distribution approaches the normal distribution if the sample size is large enough


adammoses97

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Reply #1 on: Jun 24, 2018
Answer to Question 1

Heteroscedasticity occurs when the variance of the error term is no longer constant. The least squares estimates are no longer the most efficient estimates of the coefficients of the regression models, and the usual procedures for deriving confidence intervals and tests of hypotheses for these coefficients are no longer valid.

Answer to Question 2

A


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