Which of these is not a viable 'solution' for heteroscedasticity?
A) Using generalised least squares ifr the form of heteroscedasticity is known
B) Transforming the variables into logs
C) Using heteroscedasticity-consistent standard error estimates
D) Taking the first differences of the series

Question

Quizplus · Accepted Answer

Taking the first differences of the series is generally a method used to address issues of non-stationarity in time series data, rather than heteroscedasticity. Heteroscedasticity refers to the condition where the variance of the error terms in a regression model is not constant. The other options (A, B, C) are common approaches to deal with heteroscedasticity.

Which of These Is Not a Viable 'Solution' for Heteroscedasticity