(a) How is the presence of heteroscedasticity tested? (b) How can heteroscedasticity be corrected?
Gives the consumption expenditures C and disposable income Yd for 30 families.
(a) Regress C on Yd for the entire sample and test for heteroscedasticity.
(b) Correct for heteroscedasticity if it is found in part a.
Table Consumption and Income Data for 30 Families (in U.S. Dollars)
|
Consumption
|
Income
|
|
10,600
|
10,800
|
11,100
|
12,000
|
|
11,400
|
11,700
|
12,100
|
13,000
|
|
12,300
|
12,600
|
13,200
|
14,000
|
|
13,000
|
13,300
|
13,600
|
15,000
|
|
13,800
|
14,000
|
14,200
|
16,000
|
|
14,400
|
14,900
|
15,300
|
17,000
|
|
15,000
|
15,700
|
16,400
|
18,000
|
|
15,900
|
16,500
|
16,900
|
19,000
|
|
16,900
|
17,500
|
18,100
|
20,000
|
|
17,200
|
17,800
|
18,500
|
21,000
|