What is meant by heteroscedasticity? What are its consequences? How do you detect the presence of heteroscedasticity in a data set?
Introduction In econometrics, the reliability of regression results depends heavily on assumptions about the error term. One such assumption is homoscedasticity, which implies that the variance of the error term remains constant across all levels of the explanatory variable. When this assumption is violated, we face the problem of heteroscedasticity. It is a common issue […]