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Presentation
Imposing Economic Constraints on Nonparametric Regression: Survey, Implementation and Extensions
Advances in Econometrics: Nonparametric Methods (2009)
  • Daniel J. Henderson, University of Alabama - Tuscaloosa
  • christopher parmeter, University of Miami
Abstract

Economic conditions such as convexity, homogeneity, homotheticity, and monotonicity are all important assumptions or consequences of assumptions of economic functionals to be estimated. Recent research has seen a renewed interest in imposing constraints in nonparametric regression. We survey the available methods in the literature, discuss the challenges that present themselves when empirically implementing these methods, and extend an existing method to handle general nonlinear constraints. A heuristic discussion on the empirical implementation for methods that use sequential quadratic programming is provided for the reader, and simulated and empirical evidence on the distinction between constrained and unconstrained nonparametric regression surfaces is covered.

Publication Date
2009
Citation Information
Daniel J. Henderson and christopher parmeter. "Imposing Economic Constraints on Nonparametric Regression: Survey, Implementation and Extensions" Advances in Econometrics: Nonparametric Methods (2009)
Available at: http://works.bepress.com/parms/9/