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With or Without U? The Appropriate Test for a U-Shaped Relationship*: Practitioners’ Corner

Year: 2009

Type: article

Abstract: 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.

Source: Oxford Bulletin of Economics and Statistics

DOI: 10.1111/j.1468-0084.2009.00569.x

Authors: Jo Thori Lind, Halvor Mehlum

Institution: University of Oslo

Language: English

Topic: Advanced Statistical Methods and Models

Subfield: Statistics and Probability

Field: Mathematics

Domain: Physical Sciences

Open Access status: bronze

OpenAlex ID: W1537892272

FWCI: 12.38

Cites: 21

Cited by: 2,502

Related to: 10