• Table of Contents
    • Abstract
    • Keywords
    • Article
      • Non-nested models
      • Pseudo-true values and closeness measures
      • Tests of non-nested hypotheses
      • Vuong's model selection test
      • Application to linear regression models
      • Extensions and empirical applications
    • See Also
    • Bibliography
    • How to cite this article

non-nested hypotheses

M. Hashem Pesaran and M. Rodrigo Dupleich Ulloa
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
Alternate versions available: 1987 Edition
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Abstract

This article provides an overview of the literature on hypotheses testing when the hypotheses or models under consideration are non-nested. Two models are said to be non-nested if neither can be obtained from the other by some limiting process, including the imposition of equality and/or inequality constrains on one of the model's parameters. Relevant concepts such as closeness measures and pseudo-true values are discussed and alternative approaches to testing non-nested hypotheses, including the Cox procedure, artificial nesting and the encompassing approach, are reviewed. The Vuong approach to model selection is also covered.
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Keywords

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Article

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How to cite this article

Pesaran, M. Hashem and M. Rodrigo Dupleich Ulloa. "non-nested hypotheses." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 24 October 2017 <http://www.dictionaryofeconomics.com/article?id=pde2008_N000084> doi:10.1057/9780230226203.1197

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