Estimation and Testing

Routing Summary

Covers OLS, GLS, SUR, 2SLS, Bayesian HB/EB estimation; specification testing; flexible forms; model selection.

NoteTopic
Parameter Estimation in Market ResponseOLS Eqs 5.5-5.6, GLS, SUR, 2SLS/3SLS, Bayesian posterior Eq 5.27, HB shrinkage Eq 5.30
Model Testing and SpecificationF-test Eq 5.35, t-test Eq 5.37, RESET Eq 5.40, 7 specification errors
Flexible Functional FormsTranslog, Box-Cox, LOESS, splines
Model Selection and Exploratory AnalysisAIC/BIC, cross-validation, EDA, multiple testing, pre-registration