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Heteroskedasticity in Regression: Detection and Correction
Paperback
Series: Quantitative Applications in the Social Sciences, Book 172
ISBN13: 9781452234953
Publisher: Sage Publications, Inc
Published: Jun 28 2013
Pages: 112
Weight: 0.29
Height: 0.23 Width: 5.59 Depth: 8.47
Language: English
This volume covers the commonly ignored topic of heteroskedasticity (unequal error variances) in regression analyses and provides a practical guide for how to proceed in terms of testing and correction. Emphasizing how to apply diagnostic tests and corrections for heteroskedasticity in actual data analyses, the book offers three approaches for dealing with heteroskedasticity:
- variance-stabilizing transformations of the dependent variable;
- calculating robust standard errors, or heteroskedasticity-consistent standard errors; and
- generalized least squares estimation coefficients and standard errors.
The detection and correction of heteroskedasticity is illustrated with three examples that vary in terms of sample size and the types of units analyzed (individuals, households, U.S. states). Intended as a supplementary text for graduate-level courses and a primer for quantitative researchers, the book fills the gap between the limited coverage of heteroskedasticity provided in applied regression textbooks and the more theoretical statistical treatment in advanced econometrics textbooks.
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