Nested forecast model comparisons: A new approach to testing equal accuracy

A-Tier
Journal: Journal of Econometrics
Year: 2015
Volume: 186
Issue: 1
Pages: 160-177

Authors (2)

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

We develop methods for testing whether, in a finite sample, forecasts from nested models are equally accurate. Most prior work has focused on a null of equal accuracy in population — basically, whether the additional coefficients of the larger model are zero. Our asymptotic approximation instead treats the coefficients as non-zero but small, such that, in a finite sample, forecasts from the small and large models are expected to be equally accurate. We derive the limiting distributions of tests of equal mean square error, and develop a bootstrap for inference. Simulations show that our procedures have good size and power properties.

Technical Details

RePEc Handle
repec:eee:econom:v:186:y:2015:i:1:p:160-177
Journal Field
Econometrics
Author Count
2
Added to Database
2026-01-25