Lewbel, Arthur; Lu, Xun; Su, Liangjun - In: Journal of Econometrics 184 (2015) 1, pp. 81-96
This paper provides a nonparametric test of the specification of a transformation model. Specifically, we test whether an observable outcome Y is monotonic in the sum of a function of observable covariates X plus an unobservable error U. Transformation models of this form are commonly assumed in...