Publisert i
Oxford Bulletin of Economics and Statistics 72(1), 2010, pages 109-118.
Sammendrag
Non-linear relationships are common in economic theory, and such relationships are also frequently tested empirically. We argue that the usual test of non-linear 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 both finite samples and for a large class of models.