Parsimonious Encompassing: An Application to Non-Nested Hypotheses and Hausman Specification Tests
Aug 31 1987
A notion of parsimonious encompassing is analyzed within an information matrix framework. Hausman specification tests are reinterpreted within a class of Wald encompassing tests. Assumptions are discussed under which encompassing a non-nested alternative is equivalent to parsimoniously encompassing a minimal nesting model.