Non-constant variance, also known as heteroscedasticity, occurs when the variability of a variable is unequal across the range of values of a second variable that predicts it. This phenomenon can lead to inefficient estimates and affect the validity of statistical tests, necessitating the use of specialized techniques to address it.

Non-constant Variance

Non-constant variance

Heteroscedasticity refers to the circumstance in which the variability of a variable is unequal across the range of values of a second variable that predicts it, often violating the assumptions of homoscedasticity in regression analysis. It can lead to inefficient estimates and invalid inference in statistical models, necessitating the use of robust standard errors or transformation techniques to address the issue.

heteroscedasticity

variability of a variable

range of values

statistical tests

inefficient estimates

Specialized techniques are like special tools or tricks that help us do something really well or solve tricky problems. They are used in lots of different jobs and activities to make things easier or better.

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