How is the presence of heteroscedasticity tested

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Reference no: EM13891674

(a) How is the presence of heteroscedasticity tested? (b) How can heteroscedasticity be corrected?

Gives the consumption expenditures C and disposable income Yd for 30 families.

(a) Regress C on Yd for the entire sample and test for heteroscedasticity.

(b) Correct for heteroscedasticity if it is found in part a.

Table Consumption and Income Data for 30 Families (in U.S. Dollars)

Consumption

Income

10,600

10,800

11,100

12,000

11,400

11,700

12,100

13,000

12,300

12,600

13,200

14,000

13,000

13,300

13,600

15,000

13,800

14,000

14,200

16,000

14,400

14,900

15,300

17,000

15,000

15,700

16,400

18,000

15,900

16,500

16,900

19,000

16,900

17,500

18,100

20,000

17,200

17,800

18,500

21,000

Reference no: EM13891674

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