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Cautions on Tail Index Regressions

Thomas T. Yang

arXiv 2 Oct 2025 · Econometrics

arXiv:2510.01535 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We revisit tail-index regressions. For linear specifications, we find that the usual full-rank condition can fail because conditioning on extreme outcomes causes regressors to degenerate to constants. More generally, the conditional distribution of the covariates in the tails concentrates on the values at which the tail index is minimized. Away from those points, the conditional density tends to zero. For local nonparametric tail index regression, the convergence rate can be very slow. We conclude with practical suggestions for applied work.

Citation extraction

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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
1de Haan, L. and C. Zhou (2021) Trends in Extreme Value Indices1.00053100%
2Wang, H. and C.-L. Tsai (2009) Tail Index Regression0.91613477%
3Chernozhukov, V (2005) Extremal Quantile Regression0.87472100%
4Li, R., C. Leng, and J. You (2022) Semiparametric Tail Index Regression0.73732100%
5Einmahl, J. H. J., L. Haan, and C. Zhou (2014) Statistics of Heteroscedastic Extremes0.51121100%
6de Haan, L. and A. Ferreira (2006) Extreme Value Theory: an Introduction0.51121100%
7Chernozhukov, V., I. Fernández-Val, and T. Kaji (2017) Extremal Quantile Regression0.40511100%
8Hall, P. and N. Tajvidi (2000) Nonparametric Analysis of Temporal Trend When Fitting Parametric Models to Extreme­Value Data0.40511100%
9Hill, B. M (1975) A Simple General Approach to Inference About the Tail of a Distribution0.40511100%
10Nicolau, J., P. M. Rodrigues, and M. Z. Stoykov (2023) Tail Index Estimation in the Presence of Covariates: Stock Returns’ Tail Risk Dynamics0.40511100%

Showing the top 10 of 10 scored citations.