Heteroscedasticity on OLS Estimates

In contrast, the data in the top plot of Fig. 4.2 using a constant residual variance model led to the following parameter estimates after fitting the same model volume of distribution =10.2 0.10L, clearance = 1.49 0.008 L/h, and absorption rate constant = 0.71 0.02 per h. Note that this model is the data generating model with no regression assumption violations. The residual plots from this analysis are shown in Fig. 4.4. None of the residual plots show any trend or increasing variance with increasing predicted value. Notice that the parameter estimates are less biased and have smaller standard errors than the estimates obtained from the constant variance plus proportional error model. 

This is the effect of violating the assumptions of OLS the parameter estimates have decreased precision when the incorrect residual variance model is used. The precision of the predicted values is also sacrificed. In 

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