# Re: st: Hetero explanation

 From "Jeremy Miles" <[email protected]> To [email protected] Subject Re: st: Hetero explanation Date Tue, 16 Jan 2007 10:52:16 -0800

```Think in terms of the null hypothesis (H0).  The null hypothesis is
that the data have a constant variance.  The p-value is the
probability of the chi-square, given that H0 is true.  The chi-square
is below the conventional 0.05, so you can reject (if you are using
0.05) that null hypothesis, and you therefore have evidence that the
data are heteroskedastic.

Jeremy

On 16/01/07, Joanne Marshall <[email protected]> wrote:
```
```Dear fellow,

While trying the BP test, I get the following,

Breusch-Pagan / Cook-Weisberg test for heteroskedasticity
Ho: Constant variance
Variables: fitted values of lwage

chi2(1)      =     4.23
Prob > chi2  =   0.0112

Ho- varicane of residuals are homo
H1-hetero present

is this homo or hetero? 0.0112 is very small p value so i am thinking
accepting Ho and that this is homo. but how can we define the size of p
value? do we compare it with 0.05 again?

Cheers
Jo

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```
```
--

Jeremy Miles
www.jeremymiles.co.uk

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