Question
Which assumption is violated when there is heteroscedasticity in dataset? Describe any three methods of detection of heteroscedasticity.
Answer :
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In the presence of heteroscedasticity in a dataset, the assumption of constant variance of the error terms, known as homoscedasticity, is violated. This means that the variance of the error term is not constant across all levels of the explanatory variable(s), which can lead to inefficient estimates and biased standard errors, thus affecting hypothesis testing. Three common methods for detecting heteroscedasticity are: 1.
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