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Unconditional and Conditional Heteroscedasticity

  • Unconditional heteroskedasticity is when heteroskedasticity is not related with value of the independent variable
  • Conditional heteroskedasticity is when it is related with a level of independent variable 

Effects of Heteroscedasticity

  • Regression coefficients are not affected
  • Standard errors are usually unreliable
  • Hypothesis testing of regression coefficient becomes insignificant

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