Alternative versions of the RESET test for binary response index models: a comparative study
AbstractBinary response index models may be affected by several forms of misspecification, which range from pure functional form problems (e.g. incorrect specification of the link function, neglected heterogeneity, heteroskedasticity) to various types of sampling issues (e.g. covariate measurement error, response misclassification, endogenous stratification, missing data). In this paper we examine the ability of several versions of the RESET test to detect such misspecifications in an extensive Monte Carlo simulation study. We find that: (i) the best variants of the RESET test are clearly those based on one or two fitted powers of the response index; and (ii) the loss of power resulting from using the RESET instead of a test directed against a specific type of misspecification is very small in many cases.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Evora, CEFAGE-UE (Portugal) in its series CEFAGE-UE Working Papers with number 2010_09.
Length: 33 pages
Date of creation: 2010
Date of revision:
Binary models; RESET; Misspecification.;
Other versions of this item:
- Esmeralda A. Ramalho & Joaquim J. S. Ramalho, 2012. "Alternative Versions of the RESET Test for Binary Response Index Models: A Comparative Study," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 74(1), pages 107-130, 02.
- C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- J M C Santos Silva, 1996.
"A Score Test for Non-nested Hypotheses with Applications to Discrete Data Models,"
96-28 ISSN 1350-6722, University College London, Department of Economics.
- J. M. C. Santos Silva, 2001. "A score test for non-nested hypotheses with applications to discrete data models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(5), pages 577-597.
- Esmeralda Ramalho & Joaquim Ramalho & Jose M.R. Murteira, 2012. "A supremum-type RESET test for binary choice models," Economics Bulletin, AccessEcon, vol. 32(1), pages 905-912.
- Esmeralda A. Ramalho & Joaquim J.S. Ramalho & José M.R. Murteira, 2013. "A generalized goodness-of-functional form test for binary and fractional regression models," CEFAGE-UE Working Papers 2013_09, University of Evora, CEFAGE-UE (Portugal).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Angela Pacheco).
If references are entirely missing, you can add them using this form.