Choice is suffering
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Date
2010-10-27
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Abstract
In contrast to conventional measures, the Focused Information Criterion
(FIC) allows the purpose-specific selection of models, thereby reflecting the
idea that one kind of model might be appropriate for inferences on a parameter of
interest, but not for another. Ever since its introduction, the FIC has been increasingly
applied in the realm of statistics, but this concept appears to be virtually
unknown in the economic literature. Using a straightforward analytical example,
this paper illustrates the FIC and its usefulness in economic applications. JEL classification: C3, D2
Description
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Keywords
AKAIKE Information Criterion, SCHWARZ Information Criterion, Translog Cost Function