A low-dimension portmanteau test for non-linearity

A-Tier
Journal: Journal of Econometrics
Year: 2010
Volume: 158
Issue: 2
Pages: 231-245

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

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

Abstract

A new test for non-linearity in the conditional mean is proposed using functions of the principal components of regressors. The test extends the non-linearity tests based on Kolmogorov-Gabor polynomials ([Thursby and Schmidt, 1977], [Tsay, 1986] and [Teräsvirta et al., 1993]), but circumvents problems of high dimensionality, is equivariant to collinearity, and includes exponential functions, so is a portmanteau test with power against a wide range of possible alternatives. A Monte Carlo analysis compares the performance of the test to the optimal infeasible test and to alternative tests. The relative performance of the test is encouraging: the test has the appropriate size and has high power in many situations.

Technical Details

RePEc Handle
repec:eee:econom:v:158:y:2010:i:2:p:231-245
Journal Field
Econometrics
Author Count
2
Added to Database
2026-01-25