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Testing Nonnested Models

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  • Howard Doran

Abstract

Applied economic research often involves testing between nonnested models. In such situations informal criteria are often used in preference to readily available testing procedures. This article deals with regression-based tests between nonnested models, showing the development of the J- and JA-tests from the Cox principle. Testing between linear and log-linear models is discussed as an example of how tests can be constructed when the dependent variables of competing models have a monotonic functional relationship. An empirical example is given to illustrate the procedures.

Suggested Citation

  • Howard Doran, 1993. "Testing Nonnested Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(1), pages 95-103.
    • Handle: RePEc:oup:ajagec:v:75:y:1993:i:1:p:95-103.
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    File URL: http://hdl.handle.net/10.2307/1242957
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    3. Mullen, John D., 2007. "Productivity growth and the returns from public investment in R&D in Australian broadacre agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(4), pages 1-26.
    4. Mullen, John D. & Cox, Thomas L., 1995. "The Returns From Research In Australian Broadacre Agriculture," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 39(2), pages 1-24, August.
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    6. McAleer, Michael, 1995. "The significance of testing empirical non-nested models," Journal of Econometrics, Elsevier, vol. 67(1), pages 149-171, May.
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    8. Döpke, Jörg & Gern, Klaus-Jürgen, 1993. "Indikatoren für die konjunkturellen Wirkungen der Geldpolitik: Evidenz aus sechs großen Industrieländern," Kiel Working Papers 593, Kiel Institute for the World Economy (IfW Kiel).
    9. Worthington, Andrew C & Dollery, Brian E, 1998. "The Political Determination of Intergovernmental Grants in Australia," Public Choice, Springer, vol. 94(3-4), pages 299-315, March.
    10. Mullen, John D., 1995. "The Influence of Fat and Weight on the Price of Lamb in the Homebush Livestock and Wholesale Markets," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 63(01), pages 1-13, April.
    11. Fleming, E. & Griffith, G. & Mounter, S. & Villano, R., 2018. "The value of muscle score in beef cattle auction markets," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277334, International Association of Agricultural Economists.
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