Congruence and encompassing
Congruence and encompassing
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.
data generation process, empirical model, general-to-specific modelling, encompassing, misspecification, specification
University of Southampton
Bontemps, Christophe
a0d2cf60-507b-49d1-9479-e2a4ab84f723
Mizon, Grayham E.
2b8353b4-0af4-48db-b552-6867dc1f4583
2001
Bontemps, Christophe
a0d2cf60-507b-49d1-9479-e2a4ab84f723
Mizon, Grayham E.
2b8353b4-0af4-48db-b552-6867dc1f4583
Bontemps, Christophe and Mizon, Grayham E.
(2001)
Congruence and encompassing
(Discussion Papers in Economics and Econometrics, 107)
Southampton, UK.
University of Southampton
23pp.
Record type:
Monograph
(Discussion Paper)
Abstract
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.
More information
Published date: 2001
Keywords:
data generation process, empirical model, general-to-specific modelling, encompassing, misspecification, specification
Identifiers
Local EPrints ID: 33101
URI: http://eprints.soton.ac.uk/id/eprint/33101
PURE UUID: b528ff7a-dfaa-4e30-8dd7-ef9502ff37c0
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Date deposited: 18 May 2006
Last modified: 15 Mar 2024 07:41
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Contributors
Author:
Christophe Bontemps
Author:
Grayham E. Mizon
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