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Unformatted text preview: Quiz 5 – Page 1 out of 2 Quiz 5 Introduction to Econometrics 01:220:322:02 Fall 2010 Instructor: Geoffrey Williams Name: _______________________ It is strongly encouraged that you clearly show your work to allow for partial credit. (24 points total) 1. (6 points) Sketch a scatterplot of some data which shows heteroskedasticity, and a second scatterplot of data which shows homoskedasticity. Clearly label which is which. If, like me, you're not the greatest artist, you can add a sentence explaining how you showed the homoskedasticity and the heteroskedasticity. Answer: The graph on the left shows heteroskedasticity (the variance of Y changes as you go from low X to high X), while the graph on the right shows homoskedasticity (the variance of Y is about the same across all values of X). 2. (10 points) Consider a hypothetical regression on house prices: ion goodcondit bedrooms housesize houseprice 22 442 . 1 . 103 + + = where house price is measured in thousands of dollars, house size is measured in square feet,...
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 Fall '10
 Otusbo
 Econometrics, Regression Analysis, variable bias, homoskedasticity

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