Functional Forms & Heteroskedasticity Demo

Explores non-linear relationships using logs and quadratics, and addresses violations of the constant variance assumption. Functional Forms & Heteroskedasticity Demo turns that idea into something you can manipulate directly and watch respond.

Explores non-linear relationships using logs and quadratics, and addresses violations of the constant variance assumption. It focuses on Log-Log Models, Quadratic Specifications, Heteroskedasticity, Robust Standard Errors, Breusch-Pagan Test from the “Functional Forms and Heteroskedasticity” section.

The “Slope / Coefficient (β₁)”, “Curvature (β₂)”, “Error Variance (σ)” sliders change the key inputs. Every change updates the visualization in real time, so you can see exactly how each variable affects the outcome.

This course provides a comprehensive introduction to econometrics, focusing on the application of statistical methods to economic data to estimate causal relationships and test theories. Students learn the theoretical f… This demo is the interactive piece for the “Functional Forms and Heteroskedasticity” section. Open the full Econometric Theory and Empirical Analysis with Stata course wiki at https://www.getlykke.com/explore/public/econometric-theory-and-empirical-analysis-with-055d2627-50a4-415f-9bda-e6175cdce1f8 for notes, flashcards, quizzes and the other demos.

You'll build intuition for Log-Log Models, Quadratic Specifications, Heteroskedasticity, Robust Standard Errors, Breusch-Pagan Test — and, crucially, see how they behave when you change the inputs, which is hard to get from a textbook or lecture on Econometric Theory and Empirical Analysis with Stata alone.