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Testing competing models for non-negative data with many zeros

Silva, João M. C. Santos, Tenreyro, Silvana ORCID: 0000-0002-9816-7452 and Windmeijer, Frank (2015) Testing competing models for non-negative data with many zeros. Journal of Econometric Methods, 4 (1). pp. 29-46. ISSN 2156-6674

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Identification Number: 10.1515/jem-2013-0005


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.

Item Type: Article
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Additional Information: © 2014 Walter de Gruyter GmbH
Divisions: Economics
Subjects: H Social Sciences > HB Economic Theory
Q Science > QA Mathematics
JEL classification: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods: General > C12 - Hypothesis Testing
C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C52 - Model Evaluation and Selection
Date Deposited: 22 Sep 2015 13:40
Last Modified: 12 Oct 2021 23:11

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