Lecture 5 Key Terms

Question 1

dummy variable

Answer 1

a variable equal to 1 if some statement is true and 0 if not, ie M=1 if male, M=0 if female

Question 2

breusch pagan test

Answer 2

a test that detects heteroskedasticity , null is homoskedastic errors

Question 3

weighted / generalised least squares

Answer 3

method of estimation where conditional variance function depends upon explanatory variable value

Question 4

feasible wls / gls

Answer 4

variance function is unknown, and is approximated by a parameter function with unknown parameters that need to be estimated in a first step