Economics, Econometrics and Finance
8 years ago

New method for testing model specifications in econometrics discovered!

RePEc: Research Papers in Economics
Simulated Specification Tests for Panel Multinomial Probit Models: Some Finite Sample Evidence
Jiahui Wang

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Simulation tests were conducted to check the accuracy of panel multinomial probit models. These models are used in economics to predict choices made by individuals. The tests focused on factors like missing information, irrelevant alternatives, hidden differences between individuals, and time-related connections. By using specific mathematical models, researchers found that these tests can help ensure the reliability of the predictions made by these models.