Robust tests for ARCH in the presence of the misspecified conditional mean: A comparison of nonparametric approches

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Tác giả: Daiki Maki, Yasushi Ota

Ngôn ngữ: eng

Ký hiệu phân loại: 001.422 Statistical methods

Thông tin xuất bản: 2019

Mô tả vật lý:

Bộ sưu tập: Metadata

ID: 163148

Comment: 27 pages, 3 figures, 6 TablesThis study compares statistical properties of ARCH tests that are robust to the presence of the misspecified conditional mean. The approaches employed in this study are based on two nonparametric regressions for the conditional mean. First is the ARCH test using Nadayara-Watson kernel regression. Second is the ARCH test using the polynomial approximation regression. The two approaches do not require specification of the conditional mean and can adapt to various nonlinear models, which are unknown a priori. Accordingly, they are robust to misspecified conditional mean models. Simulation results show that ARCH tests based on the polynomial approximation regression approach have better statistical properties than ARCH tests using Nadayara-Watson kernel regression approach for various nonlinear models.
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