Hi all,   I found a paper which includes the code for a two part model to calculate the healthcare expenditure. There are some parts of the code that I don't understand. During the post-processing after PROC MIXED, it used x3 x4 x6 to calculate logsigmasq, saying that they are x3 x4 x6 are covariates for variance. What does it mean? Where can I get my x3 x4 x6? Thanks   See below: proc transpose data=esttheta out=esttheta; var estimate; id covparm; run; data esttheta; set esttheta; exp_intercept=log(residual); run; data out2; if _n_ =1 then set esttheta; set out1; logsigmasq=exp_intercept+exp_x3*x3+ exp_x4*x4 +exp_x6*x6; /* x3 x4 x6 are covariates for variance */ sigmasqcompute=exp(logsigmasq); /* use below to check that you calculated sigmasqcompute correctly, It gives you sigma for the positive values used in estimation*/ sigmahat=resid/pearsonresid; sigmasq=sigmahat**2;/*this should agree with sigmasqcompute */ predposcost=exp(pred+0.5*sigmasqcompute); run; ... View more