We have the following data for 17 countries: A researcher estimates a regression using the above data and obtains that: (a) Draw a scatter plot using M and G in each of the axes and explain why the researcher should expect that there is a problem of heteroscedasticity. (b) Explain the consequences of heteroscedasticity on the properties of the estimated coefficients.

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We have the following data for 17 countries:

A researcher estimates a regression using the above data and obtains
that:


(a) Draw a scatter plot using M and G in each of the axes and explain why
the researcher should expect that there is a problem of
heteroscedasticity.
(b) Explain the consequences of heteroscedasticity on the properties of
the estimated coefficients.

Country
M
G
Country
M
G
Belgium
849
2652
Luxembourg
1368
3108
Canada
778
3888
Netherlands
704
2429
Denmark
853
3159
Norway
634
1881
France
1000
2777
215
Portugal
Spain
718
Germany
1331
3095
239
957
Greece
185
1091
Sweden
1025
4101
Ireland
399
1331
U.K.
609
2174
Italy
554
1731
U.S.A.
1248
4799
Jарan
679
1887
Transcribed Image Text:Country M G Country M G Belgium 849 2652 Luxembourg 1368 3108 Canada 778 3888 Netherlands 704 2429 Denmark 853 3159 Norway 634 1881 France 1000 2777 215 Portugal Spain 718 Germany 1331 3095 239 957 Greece 185 1091 Sweden 1025 4101 Ireland 399 1331 U.K. 609 2174 Italy 554 1731 U.S.A. 1248 4799 Jарan 679 1887
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