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8.1 For the simple regression model with heteroskedasticity, yi=1+2xi.pdf

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8.1 For the simple regression model with heteroskedasticity, yi=1+2xi+ei and var(eixi)=i2 show that the variance var(b2xi)=[i=1N(xix)2]1[i=1N(xix)2i2][i=1N(xix)2]1 reduces to var(b2x)=2/i=1N(xix)2 under homoskedasticity..

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8.1 For the simple regression model with heteroskedasticity, yi=1+2xi+ei and var(eixi)=i2 show that the variance var(b2xi)=[i=1N(xix)2]1[i=1N(xix)2i2][i=1N(xix)2]1 reduces to var(b2x)=2/i=1N(xix)2 under homoskedasticity.

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  • 1. 8.1 For the simple regression model with heteroskedasticity, yi=1+2xi+ei and var(eixi)=i2 show that the variance var(b2xi)=[i=1N(xix)2]1[i=1N(xix)2i2][i=1N(xix)2]1 reduces to var(b2x)=2/i=1N(xix)2 under homoskedasticity.