Approaches for the Joint Evaluation of Hypothesis Tests: Classical Testing, Bayes Testing, and Joint Confirmation

Kunst, Robert M. (September 2005) Approaches for the Joint Evaluation of Hypothesis Tests: Classical Testing, Bayes Testing, and Joint Confirmation. IHS Economics Series 177

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Abstract or Table of Contents

Abstract: The occurrence of decision problems with changing roles of null and alternative hypotheses has increased interest in extending the classical hypothesis testing setup. Particularly, confirmation analysis has been in the focus of some recentcontributions in econometrics. We emphasize that confirmation analysis is grounded in classical testing and should be contrasted with the Bayesian approach. Differences across the three approaches - traditional classical testing, Bayes testing, joint confirmation - are highlighted for a popular testing problem. A decision is searched for the existence of a unit root in a time-series process on the basis of two tests. One of them has the existence of a unit root as its null hypothesis and its non-existence as its alternative, while the roles of null and alternative are reversed for the other hypothesis test.;

Item Type: IHS Series
Keywords: 'Confirmation analysis' 'Decision contours' 'Unit roots'
Classification Codes (e.g. JEL): C11, C12, C22, C44
Status: Published
Date Deposited: 26 Sep 2014 10:38
Last Modified: 21 Jul 2017 05:14
URI: http://irihs.ihs.ac.at/id/eprint/1652

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