HC3

HC3, or the Heteroskedasticity-Consistent Covariance matrix estimator (version 3), is a statistical tool used in regression analysis. It helps ensure accurate estimation of the variability (standard errors) of coefficients when the data's noise levels differ across observations—a condition called heteroskedasticity. By adjusting for this, HC3 provides more reliable measures of uncertainty around your estimates, leading to more trustworthy conclusions about the relationships between variables. Essentially, HC3 improves the accuracy of statistical inference in regression models when data variability isn't consistent.