Abstract
There are certain circumstances in which the assumption of constant error variance, homoscedasticity, in the linear model is not tenable. For example, in cross-sectional analysis in economics, the units under investigation are usually firms, households, or individuals, and the degree to which the linear equation explains their behavior may depend upon their specific characteristics. We illustrate this point by the use of three examples.
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© 1984 Springer Science+Business Media New York
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Fomby, T.B., Johnson, S.R., Hill, R.C. (1984). Heteroscedasticity. In: Advanced Econometric Methods. Springer, New York, NY. https://doi.org/10.1007/978-1-4419-8746-4_9
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DOI: https://doi.org/10.1007/978-1-4419-8746-4_9
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