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Model Selection in Panel Data Models: A Generalization of the Vuong Test

Jinyong Hahn, Zhipeng Liao, Konrad Menzel, Quang Vuong

arXiv 29 Jan 2026 · Econometrics

arXiv:2601.22354 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper generalizes the classical Vuong (1989) test to panel data models by employing modified profile likelihoods and the Kullback-Leibler information criterion. Unlike the standard likelihood function, the profile likelihood lacks certain regular properties, making modification necessary. We adopt a generalized panel data framework that incorporates group fixed effects for time and individual pairs, rather than traditional individual fixed effects. Applications of our approach include linear models with non-nested specifications of individual-time effects.

Citation extraction

37
references
77
in-text mentions
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distinct cited
8
self-citations
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main-text words

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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
1Vuong, Quang H (1989) Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses self1.00074100%
2Zhipeng Liao and Xiaoxia Shi (2020) A nondegenerate Vuong test and post selection confidence intervals for semi/nonparametric models self0.9568388%
3Yoonseok Lee and Peter C.B. Phillips (2015) Model selection in the presence of incidental parameters0.87472100%
4Stéphane Bonhomme and Elena Manresa (2015) Grouped Patterns of Heterogeneity in Panel Data0.81142100%
5Iván Fernández-Val and Martin Weidner (2016) Individual and time effects in nonlinear panel models with large N, T0.73732100%
6Xiaoxia Shi (2015) A Nondegenerate Vuong Test0.64422100%
7Arellano, Manuel and Hahn, Jinyong (2007) Understanding Bias in Nonlinear Panel Models: Some Recent Developments self0.58531100%
8Manuel Arellano and Jinyong Hahn (2016) A likelihood-Based Approximate Solution to the Incidental Parameter Problem in Dynamic Nonlinear Models with Multiple Effects self0.51121100%
9Arellano, Manuel and Bonhomme, Stéphane (2009) Robust Priors in Nonlinear Panel Data Models0.40511100%
10C. Alan Bester and Christian Hansen (2009) A Penalty Function Approach to Bias Reduction in Nonlinear Panel Models with Fixed Effects0.40511100%

Showing the top 10 of 37 scored citations.