SIMULTANEOUS SPECIFICATION TESTING OF MEAN AND VARIANCE STRUCTURES IN NONLINEAR TIME SERIES REGRESSION

B-Tier
Journal: Econometric Theory
Year: 2011
Volume: 27
Issue: 4
Pages: 792-843

Authors (2)

Xi Chen, Song (not in RePEc) Gao, Jiti (Monash University)

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 proposes a nonparametric simultaneous test for parametric specification of the conditional mean and variance functions in a time series regression model. The test is based on an empirical likelihood (EL) statistic that measures the goodness of fit between the parametric estimates and the nonparametric kernel estimates of the mean and variance functions. A unique feature of the test is its ability to distribute natural weights automatically between the mean and the variance components of the goodness-of-fit measure. To reduce the dependence of the test on a single pair of smoothing bandwidths, we construct an adaptive test by maximizing a standardized version of the empirical likelihood test statistic over a set of smoothing bandwidths. The test procedure is based on a bootstrap calibration to the distribution of the empirical likelihood test statistic. We demonstrate that the empirical likelihood test is able to distinguish local alternatives that are different from the null hypothesis at an optimal rate.

Technical Details

RePEc Handle
repec:cup:etheor:v:27:y:2011:i:04:p:792-843_00
Journal Field
Econometrics
Author Count
2
Added to Database
2026-01-25