Testing Competing Models for Non-negative Data with Many Zeros
In economic applications it is often the case that the variate of interest is non-negative and its distribution has a mass-point at zero. Many regression strategies have been proposed to deal with data of this type but, although there has been a long debate in the literature on the appropriateness of different models, formal statistical tests to choose between the competing specifications are not often used in practice. We use the non-nested hypothesis testing framework of Davidson and MacKinnon (Davidson and MacKinnon 1981. “Several Tests for Model Specification in the Presence of Alternative Hypotheses.” Econometrica 49: 781–793.) to develop a novel and simple regression-based specification test that can be used to discriminate between these models.
Year of publication: |
2015
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Authors: | Santos, Silva João M. C. ; Silvana, Tenreyro ; Frank, Windmeijer |
Published in: |
Journal of Econometric Methods. - De Gruyter. - Vol. 4.2015, 1, p. 18-18
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Publisher: |
De Gruyter |
Saved in:
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