Explain variance-stabilizing transformation

Reference no: EM13137468

Consider the simple linear regression model Yi= β0+ β1xi+εi where the variance of εi is proportional to xi2, that is Var(εi)=σ2 xi2. Suppose that we use the transformation y'=y/x and x'=1/x.Is this a variance-stabilizing transformation?

Reference no: EM13137468

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