Is there evidence to suggest the model suffers from heteroskedasticity? Yes or no.

MATLAB: An Introduction with Applications
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Is there evidence to suggest the model suffers from heteroskedasticity? Yes or no. 

Suppose you are interested in using the following multiple regression model to study the
relationship between Y and X₁, X2, X3,..., XK:
Y = Bo + B1 X₁ + B₂X2 + B3X3 + .....+ BKXK + u
Though impossible to observe in reality, suppose you are able to gather a scatter plot of the
variance of the error term, Var(u/X2, X3, . . . ,X), against the first explanatory variable XI,
holding all other explanatory variables constant. This scatter plot is shown on the following
graph:
Note: Var(u/X2, X3, . . . ,X) is denoted as Var(uz) on the vertical axis of the graph.
Var(ulz)
X₁
Transcribed Image Text:Suppose you are interested in using the following multiple regression model to study the relationship between Y and X₁, X2, X3,..., XK: Y = Bo + B1 X₁ + B₂X2 + B3X3 + .....+ BKXK + u Though impossible to observe in reality, suppose you are able to gather a scatter plot of the variance of the error term, Var(u/X2, X3, . . . ,X), against the first explanatory variable XI, holding all other explanatory variables constant. This scatter plot is shown on the following graph: Note: Var(u/X2, X3, . . . ,X) is denoted as Var(uz) on the vertical axis of the graph. Var(ulz) X₁
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