MISSPECIFICATION IN SIMULTANEOUS SYSTEMS: AN ALTERNATIVE TEST AND ITS APPLICATION TO A MODEL OF THE SHRIMP MARKET

J.D. Lea and J Shonkwiler

Southern Journal of Agricultural Economics, 1988, vol. 20, issue 2, 8

Abstract: Concern over the effects of public policies based on misspecified econometric models motivates interest in a procedure to test, diagnose, and improve the specification of models that have been estimated with three-stage least squares. A test of system-wide specification based on Hausman's specification test is employed in a test of the a priori restrictions placed on the parameters of a structural model of the U.S. shrimp market. The null hypothesis of proper specification is rejected. After diagnosis via a comparison of unrestricted and restricted reduced forms and respecification, the null hypothesis cannot be rejected.

Keywords: Research; Methods/; Statistical; Methods (search for similar items in EconPapers)
Date: 1988
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Journal Article: Misspecification in Simultaneous Systems: An Alternative Test and Its Application to a Model of the Shrimp Market (1988)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:sojoae:29267

DOI: 10.22004/ag.econ.29267

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