TAIL DEPENDENCE OF OLS

B-Tier
Journal: Econometric Theory
Year: 2022
Volume: 38
Issue: 2
Pages: 273-300

Authors (2)

Oorschot, Jochem (not in RePEc) Zhou, Chen (Erasmus Universiteit Rotterdam)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper shows that if the errors in a multiple regression model are heavy-tailed, the ordinary least squares (OLS) estimators for the regression coefficients are tail-dependent. The tail dependence arises, because the OLS estimators are stochastic linear combinations of heavy-tailed random variables. Moreover, tail dependence also exists between the fitted sum of squares (FSS) and the residual sum of squares (RSS), because they are stochastic quadratic combinations of heavy-tailed random variables.

Technical Details

RePEc Handle
repec:cup:etheor:v:38:y:2022:i:2:p:273-300_2
Journal Field
Econometrics
Author Count
2
Added to Database
2026-01-29