5.6 Refer to the regression described in Exercise 5.5. a. Do you think that the regression errors...

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5.6 Refer to the regression described in Exercise 5.5.

a. Do you think that the regression errors are plausibly homoskedastic?

Explain.

b. SE(b n

1) was computed using Equation (5.3). Suppose that the regression errors were homoskedastic: Would this affect the validity of the confidence interval constructed in Exercise 5.5(c)?

Explain.

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Introduction To Econometrics

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5.6 Refer to the regression described in Exercise 5.5. a. Do you think that the regression errors...

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Introduction To Econometrics

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