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.

Question

Quizplus · Accepted Answer

In order to implement feasible WLS, we need to know the conditional variance function. This can be difficult, particularly if the true functional form is unknown and needs to be estimated. Choosing the wrong functional form can also lead to biased estimates.

In Practice, the Most Difficult Aspect of Feasible WLS Estimation