Question

Consider the model, Yi = B0 + B1 X1,i + B2 X2,i + Ui, where sorting the residuals based on the X1,i and X2,i gives: X1 X2 Goldfeld-Quandt Statistic 1.362 (X1) 4.527 (X2) If there is heteroskedasticity present at the 5% critical-F value of 1.624, then choose the most appropriate heteroskedasticity correction method.

A. Heteroskedastic correction based on X2.

B. Heteroskedastic correction based on X1.

C. No heteroskedastic correction needed.

D. White's heteroskedastic-consistent standard errors

E. Not enough information.

Answer 1

Answer:

Given that:

In statistics heteroskedasticity happens when the standard errors of a variable mentioned over a specific amount of time are non constant

Consider the model, , where sorting the residuals based on the and

Goldfeld-Quandt Statistic	1.362	4.527

If there is heteroskedasticity present at the 5% critical-F value of 1.624

Based on the given data the answer is

D) White's heteroskedastic-consistent standard errors

Option (D) is correct answer