Skip to main content

Table 2 Monte Carlo experiment for three practices and 5,000 observations (10,000 draws)

From: A note on testing for complementarity and substitutability in the case of multiple practices

True effect σε = 0.25 σε = 1 σε = 3.5
  Compl Neither Subst Compl Neither Subst Compl Neither Subst
Multiple-restrictions test
 Complements 4,236 67 0 4,236 67 0 3,634 660 9
 Neither 24 1,403 14 24 1,403 14 220 1,002 219
 Substitutes 0 45 4,211 0 45 4,211 7 651 3,598
 Correct (%)   98.50%    98.50%    82.34%  
All cross-term test
 Complements 4,303 0 0 4,295 8 0 3,628 674 1
 Neither 353 732 356 356 727 358 216 1,023 202
 Substitutes 0 0 4,256 0 4 4,252 0 664 3,592
 Correct (%)   92.91%    92.74%    82.43%  
Single cross-term test
 Complements 4,011 124 168 3,948 209 146 3,541 692 70
 Neither 341 734 366 351 734 356 209 1,028 204
 Substitutes 178 102 3,976 148 190 3,918 59 737 3,460
 Correct (%)   87.21%    86.00%    80.29%