What happens to ordinary least squares estimators if their variances of the residual not constant?

Calculus For The Life Sciences
2nd Edition
ISBN:9780321964038
Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Chapter1: Functions
Section1.EA: Extended Application Using Extrapolation To Predict Life Expectancy
Problem 5EA
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QUESTION 1
a)i) What happens to ordinary least squares estimators if their variances of the residual
is not constant?
ii) Consider the following regression model. The dependent variable Y, using data for 60
different countries in the year 2018, where X, X 2 and X3, are three explanatory variables.
Yi = Bo + B,X1 - B2X2 + B>Xa + µ
R? = 0.92
If the variances of the residual is not constant was suspected in the model.
Based on the information above perform an appropriate test to detect the problem at 5%
level of significance given auxiliary coefficient of determination is equal 0.398.
Transcribed Image Text:QUESTION 1 a)i) What happens to ordinary least squares estimators if their variances of the residual is not constant? ii) Consider the following regression model. The dependent variable Y, using data for 60 different countries in the year 2018, where X, X 2 and X3, are three explanatory variables. Yi = Bo + B,X1 - B2X2 + B>Xa + µ R? = 0.92 If the variances of the residual is not constant was suspected in the model. Based on the information above perform an appropriate test to detect the problem at 5% level of significance given auxiliary coefficient of determination is equal 0.398.
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