If You Model Has Heteroskedastic Error Terms,but You Do Not

question 8

Multiple Choice

If you model has heteroskedastic error terms,but you do not know the functional form of the variance equation,what should be done?

• A)use White's Robust Estimator
• B)use weighted least squares
• C)try different functional forms for the variance until the Lagrange Multiplier falls 10%
• D)add observations to the dataset and estimate again

---

Definitions:

Tablets

Portable, flat screen computers that use touchscreens as their primary input device, often used for browsing the internet, reading ebooks, and other multimedia tasks.

Sugar Pills

Placebo tablets made of sugar and other inert substances, used in clinical trials to test the effectiveness of medications.

Placebo Effects

Positive changes in a patient's condition after receiving a treatment with no therapeutic effect, attributed to the individual's belief in the treatment's efficacy.

Physical Disorders

Medical conditions primarily affecting the body's structure or function, not primarily due to mental health issues.