Kindly provide some explanation or any derivations for the selected answer: Assi
ID: 3310156 • Letter: K
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Kindly provide some explanation or any derivations for the selected answer:
Assignment 4. Consider the linear regression model Yi-A) + AXit ui for i = 1, 2, , n. Adding the "robust"-option to a linear regression in Stata means that A) Stata corrects for general model misspecification B) the caleulated standard errors are valid in large samples even if Var u, X] is not a constant number for i = 1, 2 . . . . . TI C) the calculated standard errors are valid in large samples even if Var u is on D) the calculated standard errors are valid in large samples even if u is not Nor constant for i = 1, 2, . . . , n. mally distributed (which must hold if "robust" is not included) for i -1,2,.. ,Explanation / Answer
The option will be (D). Because,robust regression is basically made when the errors are not normally distributed.Adding 'robust' option will make the errors remain valid for very large samples even if the errors are not normal.It means that,for large sample the robust errors will have normal behaviours.If we dont include robust option and data is not normal,we may observe some unusual behaiour in error scatterplot which is not normal..
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