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The misuse of the Vuong test for non-nested models to test for zero-inflation

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  • Wilson, Paul

Abstract

The Vuong test for non-nested models is being widely used as a test of zero-inflation. We show that such use is erroneous. We see that this stems from a misunderstanding of what is meant by the term “non-nested model” and suggest other approaches for determining zero-inflation

Suggested Citation

  • Wilson, Paul, 2015. "The misuse of the Vuong test for non-nested models to test for zero-inflation," Economics Letters, Elsevier, vol. 127(C), pages 51-53.
    • Handle: RePEc:eee:ecolet:v:127:y:2015:i:c:p:51-53
    DOI: 10.1016/j.econlet.2014.12.029
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    References listed on IDEAS

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    1. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-333, March.
    2. Bruce A. Desmarais & Jeffrey J. Harden, 2013. "Testing for zero inflation in count models: Bias correction for the Vuong test," Stata Journal, StataCorp LP, vol. 13(4), pages 810-835, December.
    3. David Todem & Wei-Wen Hsu & KyungMann Kim, 2012. "On the Efficiency of Score Tests for Homogeneity in Two-Component Parametric Models for Discrete Data," Biometrics, The International Biometric Society, vol. 68(3), pages 975-982, September.
    4. Dietz, Ekkehart & Bohning, Dankmar, 2000. "On estimation of the Poisson parameter in zero-modified Poisson models," Computational Statistics & Data Analysis, Elsevier, vol. 34(4), pages 441-459, October.
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    More about this item

    Keywords

    Non-nested models; Zero-inflation; Vuong test;
    All these keywords.

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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