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Diagnostic Testing in Applied Econometrics

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  • JOHN J. BEGGS

Abstract

Economic policy formation and the development of economic theory both rely ultimately upon empirical analysis for their direction and sustenance. Recent contributions from econometric theory suggest that the quality of the advice obtained from applied econometric research can be considerably improved by more systematic testing of empirical models. These new tests help identify both strengths and weaknesses of the models. Though fundamental economic theory and good knowledge of data are the primary ingredients of applied economic research, these new diagnostic tests are an important adjunct to existing methodology. This survey introduces the non‐specialist econometrician to diagnostic model testing, and thoughout emphasizes the heuristic rather than the mathematical underpinnings of the testing strategy.

Suggested Citation

  • John J. Beggs, 1988. "Diagnostic Testing in Applied Econometrics," The Economic Record, The Economic Society of Australia, vol. 64(2), pages 81-101, June.
    • Handle: RePEc:bla:ecorec:v:64:y:1988:i:2:p:81-101
    DOI: 10.1111/j.1475-4932.1988.tb02044.x
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    Cited by:

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    2. McAleer, Michael, 1995. "The significance of testing empirical non-nested models," Journal of Econometrics, Elsevier, vol. 67(1), pages 149-171, May.
    3. Francis G. Castles & Steve Dowrick, 1990. "The Impact of Government Spending Levels on Medium-Term Economic Growth in the Oecd, 1960-85," Journal of Theoretical Politics, , vol. 2(2), pages 173-204, April.
    4. Akinleye, S.O. & Rahji, M.A.Y., 2007. "Nutrient elasticities among Nigerian households differentiated by income," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(2), pages 1-15, June.
    5. William Martin & Cong S. Pham, 2020. "Estimating the gravity model when zero trade flows are frequent and economically determined," Applied Economics, Taylor & Francis Journals, vol. 52(26), pages 2766-2779, May.
    6. Loungani, Prakash & Razin, Assaf & Yuen, Chi-Wa, 2001. "Capital mobility and the output-inflation tradeoff," Journal of Development Economics, Elsevier, vol. 64(1), pages 255-274, February.
    7. Hogan, Lindsay & Thorpe, Sally & Swan, Anthony & Middleton, Simon, 1999. "Pricing of Australia's coking coal exports: A regional hedonic analysis," Resources Policy, Elsevier, vol. 25(1), pages 27-38, March.
    8. Philip J. Grossman, 1990. "The Impact of Federal and State Grants on Local Government Spending: a Test of the Fiscal Illusion Hypothesis," Public Finance Review, , vol. 18(3), pages 313-327, July.
    9. P. J. Gunawardana & E. A. Oczkowski, 1992. "Government Policies And Agricultural Supply Response: Paddy In Sri Lanka," Journal of Agricultural Economics, Wiley Blackwell, vol. 43(2), pages 231-242, May.
    10. Paul Cashin, 1991. "A Model Of The Disaggregated Demand For Meat In Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 35(3), pages 263-283, December.
    11. Richard C.K. Burdekin, 1992. "Assessing the Impact of US Macroeconomic Policies and Inflation Rates on the Australian Economy," The Economic Record, The Economic Society of Australia, vol. 68(1), pages 16-30, March.
    12. Allan P. Layton, 1992. "An Estimated Australian Macroeconomic Misery Index," The Economic Record, The Economic Society of Australia, vol. 68(2), pages 118-124, June.
    13. Crihfield, John B. & Giertz, J. Fred & Mehta, Shekhar, 1995. "Economic growth in the American states: The end of convergence?," The Quarterly Review of Economics and Finance, Elsevier, vol. 35(35), pages 551-577.
    14. Brander, James A & Dowrick, Steve, 1994. "The Role of Fertility and Population in Economic Growth: Empirical Results from Aggregate Cross-National Data," Journal of Population Economics, Springer;European Society for Population Economics, vol. 7(1), pages 1-25.
    15. Jae-Hyung Lee, 2003. "Investigating a “New Paradigm†on Strategy against Corruption in the Private Sector," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 6(2), pages 137-159, September.

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