Heteroskedasticity is produced by:

Question

Quizplus · Accepted Answer

Heteroskedasticity is produced by nonconstant variance in the disturbance term, which means that the variance of the residuals is not consistent across all levels of the independent variables. This violates one of the assumptions of linear regression, which requires homoscedasticity (constant variance). Normally distributed and randomly distributed residuals do not in themselves cause heteroskedasticity, and autocorrelation refers to the correlation between the errors in a time-series model, not the variability of the errors.

Heteroskedasticity Is Produced By