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With or Without U? The Appropriate Test for a U-Shaped Relationship

Oxford bulletin of economics and statistics, 2010-02, Vol.72 (1), p.109-118 [Peer Reviewed Journal]

Blackwell Publishing Ltd and the Department of Economics, University of Oxford, 2009 ;Copyright Blackwell Publishing Ltd. Feb 2010 ;ISSN: 0305-9049 ;EISSN: 1468-0084 ;DOI: 10.1111/j.1468-0084.2009.00569.x

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  • Title:
    With or Without U? The Appropriate Test for a U-Shaped Relationship
  • Author: Lind, Jo Thori ; Mehlum, Halvor
  • Subjects: 20th century ; C12 ; C20 ; Correlation analysis ; Economic models ; Economic theory ; Equilibrium models ; Equilibrium theory ; Mathematical economics ; Studies
  • Is Part Of: Oxford bulletin of economics and statistics, 2010-02, Vol.72 (1), p.109-118
  • Description: Nonlinear relationships are common in economic theory, and such relationships are also frequently tested empirically. We argue that the usual test of nonlinear relationships is flawed and derive the appropriate test for a U‐shaped relationship. Our test gives the exact necessary and sufficient conditions for the test of a U shape in finite samples in a large class of models.
  • Publisher: Oxford, UK: Blackwell Publishing Ltd
  • Language: English
  • Identifier: ISSN: 0305-9049
    EISSN: 1468-0084
    DOI: 10.1111/j.1468-0084.2009.00569.x
  • Source: Alma/SFX Local Collection
    RePEc
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