We develop a method of testing linearity using power transforms of regressors, allowing for stationary processes and time trends. The linear model is a simplifying hypothesis that derives from the power transform model in three different ways, each producing its own identification problem. We...

Researchers utilizing regression discontinuity design (RDD) commonly test for running variable (RV) manipulation around a cutoff, but incorrectly assert that insignificant manipulation test statistics are evidence of negligible manipulation. I introduce simple frequentist equivalence testing...

We provide a methodology for testing a polynomial model hypothesis by extending the approach and results of Baek, Cho, and Phillips (2015; Journal of Econometrics; BCP) that tests for neglected nonlinearity using power transforms of regressors against arbitrary nonlinearity. We examine and...

This note demonstrates that in applied regression analysis, the variance of a coefficient of interest may decrease from the inclusion of a control variable, contrasting with Clarke's assertion (2005, 2009) that the variance can only increase or stay the same. Practitioners may thus be...

In this paper, we consider three major types of nonparametric regression tests that are based on kernel and local polynomial smoothing techniques. Their asymptotic power comparisons are established systematically under the fixed and contiguous alternatives, and are also illustrated through...

This paper proposes an asymptotically valid permutation test for a testable implication of the identification assumption in the regression discontinuity design (RDD). Here, by testable implication, we mean the requirement that the distribution of observed baseline covariates should not change...

By combining two alternative formulations of a test statistic with two alternative resamplingschemes we obtain four different bootstrap tests. In the context of static linear regression modelstwo of these are shown to have serious size and power problems, whereas the remaining two areadequate...

In models that have a representation of the form       ) , ( x g y the Wald test for ˆBeta has systematically wrong size in finite samples when the indentifying parameter Gamma is small relative to its estimation error. An alternative test based on linearization of g(.) can be...

The Regression Kink (RK) design is an increasingly popular empirical method, with more than 20 studies circulated using RK in the last 5 years since the initial circulation of Card, Lee, Pei and Weber (2012). We document empirically that these estimates, which typically use local linear...