In Practice, the Most Difficult Aspect of Feasible WLS Estimation

question 36

Multiple Choice

In practice, the most difficult aspect of feasible WLS estimation is

• A)knowing the functional form of the conditional variance.
• B)applying the WLS rather than the OLS formula.
• C)finding an econometric package that actually calculates WLS.
• D)applying WLS when you have a log-log functional form.

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Definitions:

Nominal Data

Nominal data refers to a type of data that is categorized without a natural order or rank, such as names, labels, or categories.

Z-test

A statistical test used to determine if there is a significant difference between the means of two variables, based on a normal distribution.

Chi-squared Distribution

A statistical distribution showing how the sum of squared independent standard normal variables is distributed, often used in hypothesis testing.

Goodness-of-fit Test

A statistical test used to determine if sample data fits a distribution from a population with a normal distribution.