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Adaptive Random Bandwidth for Inference in CAViaR Models

Alain Hecq, Li Sun

arXiv 2 Feb 2021 · Econometrics

arXiv:2102.01636 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper investigates the size performance of Wald tests for CAViaR models (Engle and Manganelli, 2004). We find that the usual estimation strategy on test statistics yields inaccuracies. Indeed, we show that existing density estimation methods cannot adapt to the time-variation in the conditional probability densities of CAViaR models. Consequently, we develop a method called adaptive random bandwidth which can approximate time-varying conditional probability densities robustly for inference testing on CAViaR models based on the asymptotic normality of the model parameter estimator. This proposed method also avoids the problem of choosing an optimal bandwidth in estimating probability densities, and can be extended to multivariate quantile regressions straightforward.

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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
1Engle, R. F. and Manganelli, S (2004) Caviar: Conditional autoregressive value at risk by regression quantiles0.92328679%
2Koenker, R (2005) Quantile regression0.81142100%
3de Paula Ferrari, S. L. and Cribari-Neto, F (1993) On the corrections to the wald test of non-linear restrictions0.64422100%
4Phillips, P. C. and Park, J. Y (1988) On the formulation of wald tests of nonlinear restrictions0.64422100%
5Lagarias, J. C., Reeds, J. A., Wright, M. H., and Wright, P. E (1998) Convergence properties of the nelder–mead simplex method in low dimensions0.5112250%
6Duffie, D. and Pan, J (1997) An overview of value at risk0.40511100%
7Hecq, A. and Sun, L (2020) Selecting between causal and noncausal models with quantile autoregressions self0.40511100%
8Hendricks, W. and Koenker, R (1992) Hierarchical spline models for conditional quantiles and the demand for electricity0.40511100%
9Huber, P. J. et al (1967) The behavior of maximum likelihood estimates under nonstandard conditions0.40511100%
10Koenker, R. and Xiao, Z (2006) Quantile autoregression0.40511100%

Showing the top 10 of 15 scored citations.