Selection Procedures for Order Statistics in Empirical Economic Studies

William Horrace

Econometrics from University Library of Munich, Germany

Abstract: In a presentation to the American Economics Association, McCloskey (1998) argued that "statistical significance is bankrupt" and that economists' time would be "better spent on finding out How Big Is Big". This brief survey is devoted to methods of determining "How Big Is Big". It is concerned with a rich body of literature called selection procedures, which are statistical methods that allow inference on order statistics and which enable empiricists to attach confidence levels to statements about the relative magnitudes of population parameters (i.e. How Big Is Big). Despite their prolonged existence and common use in other fields, selection procedures have gone relatively unnoticed in the field of economics, and, perhaps, their use is long overdue. The purpose of this paper is to provide a brief survey of selection procedures as an introduction to economists and econometricians and to illustrate their use in economics by discussing a few potential applications. Both simulated and empirical examples are provided.

Keywords: Ranking and selection; multiple comparisons; hypothesis testing (search for similar items in EconPapers)
JEL-codes: C10 C12 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2002-06-20
New Economics Papers: this item is included in nep-ecm
Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on HP; pages: 26; figures: included. A survey of selection procedures useful in economics
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpem:0206005

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