Congruence and encompassing

Bontemps, Christophe and Mizon, Grayham E. (2001) Congruence and encompassing. Southampton, UK, University of Southampton, 23pp. (Discussion Papers in Economics and Econometrics, 0107).


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This paper considers the relationship between congruence and encompassing. Congruence is defined formally, and though it is not testable directly, it can be tested indirectly via tests of misspecification. Empirically more than one model can appear congruent, but that which encompasses its rivals is dominant, will encompass all models nested within it, and accurately predict the misspecifications of non-congruent models. These results are consistent with a general-to-specific modelling strategy being successful in practice. An empirical example illustrates these points.

Item Type: Monograph (Discussion Paper)
Keywords: data generation process, empirical model, general-to-specific modelling, encompassing, misspecification, specification
Subjects: H Social Sciences > HA Statistics
Divisions : University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 33101
Accepted Date and Publication Date:
2001Made publicly available
Date Deposited: 18 May 2006
Last Modified: 31 Mar 2016 11:59

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