An alternative method correcting BDR type of heteroskedasticity by the weighting re-estimated absolute residuals |
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Authors: | Re?it Çelik Ayd?n Erar |
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Institution: | 1. Department of Statistics, Y?ld?z Technical University, Istanbul, Turkeyresitcelik@gmail.com rcelik@yildiz.edu.tr;3. Department of Statistics, Mimar Sinan Fine Arts University, Istanbul, Turkey |
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Abstract: | The aim of this paper is to introduce a new method which corrects residual variances for the butterfly distributed residuals (BDR). Distribution theory, confidence intervals, and tests of hypotheses are valid and meaningful only if the standard regression assumptions are satisfied. Heteroskedasticity is one of the violations of these assumptions and BDR is another type of heteroskedasticity. This study reveals an alternative approach to correct the BDR type of heteroskedasticity by the weighting re-estimated absolute residuals (WRAR). After giving brief information about heteroskedasticity and BDR type of heteroskedasticity, WRAR is introduced. WRAR and the usual variance stabilizing techniques are compared on multiple and simple regression models. |
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Keywords: | Butterfly distributed residuals Centered external variable Heteroskedasticity Non constant variance Re-estimated absolute residuals Standard deviation function Variance function |
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