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Economics

You are estimating a cross-section regression for a sample of 100 cities in the US in which you hope to explain expenditure on education as a function of the median income in the community, the number of school-age children, and the level of state and federal grants received for educational purposes.

Would you expect hetroscedasticity to be a problem in this case? If, so what would be a proper way to test for hetroscedacisity? Would you use the Goldfeld-Quandt test or the White test? Why?

What would be the statistical properties of the estimated coefficients if you don’t do proper correction?

How would you correct for hetroscadecity?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91848271

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