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Answer: The variance of the error terms is not constant
Heteroskedasticity occurs when the variance of the residuals, commonly known as error terms, is not the same across all observations in the sample. It is the opposite of homoskedasticity, which occurs when the variance of the residuals is constant across all observations.
Author: Nikitesh Somanthe
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What is the implication of having heteroskedastic regression?
A
The variance of the error terms is constant
B
The variance of the error terms is not constant
C
Subsamples are equally spread out
D
The independent variable has no linear relationship with the dependent variable
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