This is the sixth in a series of lecture notes that, tied together in a manual, you might call “practical regression.” The purpose of these notes is to complement the theoretical content of most statistics texts practices based on nearly three decades of experience of the author, along with over a hundred years experience of colleagues who have offered advice tips. As the title of “practical regression” implies, these notes are a guide to regression in practice. This paper first describes the problems that arise when variables are measured with noise. Note progresses to explain how to test and correct for heteroscedasticity. It also explains why it is necessary to adjust the standard errors when working with grouped data.
Source: Kellogg School of Management
Release: June 11, 2012. Prod #: KEL640-PDF-ENG
Practice Noise regression, heteroskedasticity and clustered Data Case Solution