170 Heteroskedasticity how to fix it

This video explains how to address heteroskedasticity in econometrics by using robust standard errors. Learn how robust standard errors, also known as heteroskedasticity-consistent standard errors, allow each observation to have its own level of variability, unlike traditional standard errors which assume equal error variance. Discover that while coefficients remain the same, crucial inference statistics like t-stats, p-values, and confidence intervals are corrected, ensuring valid results whether heteroskedasticity is present or not. Understand why robust standard errors are often used by default in applied economics, especially with cross-sectional data, and what they cannot fix, such as omitted variable bias or endogeneity. Visit AxiomTutoring.com and subscribe to @AxiomTutoringCourses.