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The New Palgrave Dictionary of Economics pp 9617–9626Cite as

Palgrave Macmillan

Non-nested Hypotheses

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Abstract

This article provides an overview of the literature on hypotheses testing when the hypotheses or models under consideration are non-nested. Two models are said to be non-nested if neither can be obtained from the other by some limiting process, including the imposition of equality and/or inequality constrains on one of the model’s parameters. Relevant concepts such as closeness measures and pseudo-true values are discussed and alternative approaches to testing non-nested hypotheses, including the Cox procedure, artificial nesting and the encompassing approach, are reviewed. The Vuong approach to model selection is also covered.

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  1. http://link.springer.com/referencework/10.1057/978-1-349-95121-5

    M. Hashem Pesaran & M. Rodrigo Dupleich Ulloa

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  1. M. Hashem Pesaran
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  2. M. Rodrigo Dupleich Ulloa
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Hashem Pesaran, M., Rodrigo Dupleich Ulloa, M. (2018). Non-nested Hypotheses. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1835

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