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LM-BIC Model Selection in Semiparametric Models

Ivan Korolev

arXiv 26 Nov 2018 · Econometrics · 1 citations (OpenAlex)

arXiv:1811.10676 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper studies model selection in semiparametric econometric models. It develops a consistent series-based model selection procedure based on a Bayesian Information Criterion (BIC) type criterion to select between several classes of models. The procedure selects a model by minimizing the semiparametric Lagrange Multiplier (LM) type test statistic from Korolev (2018) but additionally rewards simpler models. The paper also develops consistent upward testing (UT) and downward testing (DT) procedures based on the semiparametric LM type specification test. The proposed semiparametric LM-BIC and UT procedures demonstrate good performance in simulations. To illustrate the use of these semiparametric model selection procedures, I apply them to the parametric and semiparametric gasoline demand specifications from Yatchew and No (2001). The LM-BIC procedure selects the semiparametric specification that is nonparametric in age but parametric in all other variables, which is in line with the conclusions in Yatchew and No (2001). The results of the UT and DT procedures heavily depend on the choice of tuning parameters and assumptions about the model errors.

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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
1Yatchew, A. and J. A. No (2001) Household Gasoline Demand in Canada1.00073100%
2Korolev, I (2018) A Consistent LM Type Specification Test for Semiparametric Models self0.89718972%
3Andrews, D. W. K (1999) Consistent Moment Selection Procedures for Generalized Method of Moments Estimation0.40511100%
4Andrews, D. W. K. and B. Lu (2001) Consistent model and moment selection procedures for GMM estimation with application to dynamic panel data models0.40511100%
5Belloni, A. and V. Chernozhukov (2013) Least squares after model selection in high-dimensional sparse models0.40511100%
6Caner, M (2009) Lasso-Type GMM Estimator0.40511100%
7Hannan, E. J (1980) The Estimation of the Order of an ARMA Process0.40511100%
8Hannan, E. and B. G. Quinn (1979) The Determination of the Order of an Autoregression0.40511100%
9Hausman, J. A. and W. K. Newey (1995) Nonparametric Estimation of Exact Consumers Surplus and Deadweight Loss0.40511100%
10Hong, H., B. Preston, and M. Shum (2003) Generalized Empirical Likelihood-Based Model Selection Criteria for Moment Condition Models0.40511100%

Showing the top 10 of 20 scored citations.