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Cross Validation Based Model Selection via Generalized Method of Moments

Junpei Komiyama, Hajime Shimao

arXiv 18 Jul 2018 · Econometrics · 2 citations (OpenAlex)

arXiv:1807.06993 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Structural estimation is an important methodology in empirical economics, and a large class of structural models are estimated through the generalized method of moments (GMM). Traditionally, selection of structural models has been performed based on model fit upon estimation, which take the entire observed samples. In this paper, we propose a model selection procedure based on cross-validation (CV), which utilizes sample-splitting technique to avoid issues such as over-fitting. While CV is widely used in machine learning communities, we are the first to prove its consistency in model selection in GMM framework. Its empirical property is compared to existing methods by simulations of IV regressions and oligopoly market model. In addition, we propose the way to apply our method to Mathematical Programming of Equilibrium Constraint (MPEC) approach. Finally, we perform our method to online-retail sales data to compare dynamic market model to static model.

Citation extraction

26
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68
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Rivers, D. and Q. Vuong (2002) Model selection tests for nonlinear dynamic models1.00053100%
2Andrews, D. W. K (1999) Consistent moment selection procedures for generalized method of moments estimation0.87452100%
3Conlon, C. T (2012) A dynamic model of prices and margins in the lcd tv industry0.87452100%
4Nair, H (2007) Intertemporal price discrimination with forward-looking consumers: Application to the us market for console video-games0.87452100%
5Su, C.-L. and K. L. Judd (2012) Constrained optimization approaches to estimation of structural models0.87452100%
6Gowrisankaran, G. and M. Rysman (2012) Dynamics of consumer demand for new durable goods0.81142100%
7Berry, S., J. Levinsohn, and A. Pakes (1995) Automobile prices in market equilibrium0.73732100%
8Hall, A (2005) Generalized Method of Moments0.69371100%
9Hall, A. R. and D. Pelletier (2011) Non-Nested Testing in Models Estimated via Generalized Method of Moments0.64441100%
10Hu, W.-M., J. Xiao, and X. Zhou (2014) Collusion or competition? interfirm relationships in the chinese auto industry0.64422100%

Showing the top 10 of 30 scored citations.