Which test for heteroskedasticity should you use if you suspect different variances of the error term for different groups of observations?
A)White test
B)Lagrange Multiplier test
C)Goldfeld-Quandt test
D)Chow Test

Question

Quizplus · Accepted Answer

The Goldfeld-Quandt test is specifically designed to test for heteroskedasticity in which the variance of the error term may differ across different groups of observations. This test is based on the premise that if the variances are different, then the residuals will be distributed differently across the two groups. Therefore, the Goldfeld-Quandt test is a good choice in such situations.

Which Test for Heteroskedasticity Should You Use If You Suspect