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, 107).

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Description/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.

Item Type: Monograph (Discussion Paper)
Keywords: data generation process, empirical model, general-to-specific modelling, encompassing, misspecification, specification
Subjects:
ePrint ID: 33101
Date :
Date Event
2001Published
Date Deposited: 18 May 2006
Last Modified: 16 Apr 2017 22:18
Further Information:Google Scholar
URI: http://eprints.soton.ac.uk/id/eprint/33101

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