Methodological guide to the augmented ARDL model: step-by-step application with South Korean data
Muhammad Raees Shaik Saffarudin,
Soo Khoon Goh () and
Robert McNown
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Muhammad Raees Shaik Saffarudin: Sunway College Johor Bahru
Soo Khoon Goh: Universiti Sains Malaysia
Robert McNown: University of Colorado at Boulder
Quality & Quantity: International Journal of Methodology, 2025, vol. 59, issue 5, No 30, 4646 pages
Abstract:
Abstract This paper provides a detailed, step-by-step guide for implementing the Augmented Autoregressive Distributed Lag (A-ARDL) method, focusing on the aging-income inequality nexus in South Korea. The A-ARDL method has gained popularity in fields such as energy, development, and population economics due to its enhanced robustness in testing long-run relationships. The vital contribution of the A-ARDL model is that it complements the existing two tests in the ARDL model by incorporating an extra F-test on the lagged-level of the independent variable(s), significantly reducing the risk of spurious cointegration. Despite its advantages, a common challenge in applying the A-ARDL model is the lack of easily accessible program code. Consequently, many researchers rely on automated ARDL procedures in EViews, which often omit the additional test. To that effect, this paper offers a structured, stepwise approach to applying the A-ARDL model, enabling researchers to correctly replicate, apply, and interpret their findings for more effective policy analysis.
Keywords: Augmented ARDL; Cointegration; Lagged-level of independent variable test; Step-by-step guide (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11135-025-02136-4
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