In short, in the presence of heteroscedasticity, the usual hypothesis-testing routine is not reliable, raising the possibility of drawing misleading conclusions Heteroscedasticity is potentially a serious problem, for it might destroy the whole edifice of the standard, and so routinely used OLS estimation and hypothesis-testing procedure. A• In short, in the presence of heteroscedasticity, the usual hypothesis-testing routine is not reliable, raising the possibility of drawing misleading conclusions. • Heteroscedasticity is potentially a serious problem, for it might destroy the whole edifice of the standard, and so routinely used, OLS estimation and hypothesis-testing procedure