Abstract
In this study, we review the graphical methods suggested in Davidson and MacKinnon (Davidson, Russell, and James G. MacKinnon. 1998. "Graphical Methods for Investigating the Size and Power of Hypothesis Tests."The Manchester School 66 (1): 1-26.) that can be used to investigate size and power properties of hypothesis tests for undergraduate and graduate econometrics courses. These methods can be used to assess finite sample properties of various hypothesis tests through simulation studies. In addition, these methods can be effectively used in classrooms to reinforce students' understanding of basic hypothesis testing concepts such as Type I error, Type II error, size, power, p-values and under-or-over-sized tests. We illustrate the procedural aspects of these graphical methods through Monte Carlo experiments, and provide the implementation codes written in Matlab and R for the classroom applications.
| Original language | English |
|---|---|
| Article number | 20150014 |
| Journal | Journal of Econometric Methods |
| Volume | 6 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2017 |
| Externally published | Yes |
Bibliographical note
Publisher Copyright:© 2017 Walter de Gruyter GmbH, Berlin/Boston 2017.
Funding
This research was supported, in part, by a grant of computer time from the City University of New York High Performance Computing Center under NSF Grants CNS-0855217 and CNS-0958379.
| Funders | Funder number |
|---|---|
| City University of New York High Performance Computing Center | |
| National Science Foundation | CNS-0958379, CNS-0855217 |
Keywords
- hypothesis tests
- P value discrepancy plots
- P value plots
- power
- size
- size-power curves