LEVEL 05 · 80 MIN
Variance Virus
Contain the variance outbreak.
The coefficient system is stable, but uncertainty is mutating across observations. Trace the residual pattern, test the variance process, and deploy a remedy without confusing robust inference with causal proof.
MISSION OBJECTIVES
- Define and recognise heteroskedasticity in residual patterns.
- Explain its consequences for OLS efficiency and conventional inference.
- Use and interpret robust standard errors.
- Apply Breusch–Pagan and White diagnostic logic.
- Choose among robust inference, respecification, WLS, and feasible GLS with stated assumptions.