Information matrix test parameter heterogeneity and arch a synthesis

Anil K. Bera, Sangkyu Lee

Research output: Contribution to journalArticlepeer-review

Abstract

We apply the White information matrix (1M) test to the linear regression model with auto correlated errors. A special case of one component of the test is found to be identical to the Engle Lagrange multiplier (LM) test for autoregressive conditional heteroskedasticity (ARCH). Given Cheshers interpretation of the 1Mtest as a test for parameter heterogeneity, this establishes a connection among the 1Mtest, ARCH and parameter variation. This also enables us to specify conditional heteroskedasticity in a more general and convenient way. Other interesting by products of our analysis are tests for the variation in conditional and static skewness which we call tests for "heterocliticity".

Original languageEnglish (US)
Pages (from-to)229-240
Number of pages12
JournalReview of Economic Studies
Volume60
Issue number1
DOIs
StatePublished - Jan 1993

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint

Dive into the research topics of 'Information matrix test parameter heterogeneity and arch a synthesis'. Together they form a unique fingerprint.

Cite this