Choosing Between Two Income Distribution Models With Contaminated Data
نویسنده
چکیده
Choosing between two income distribution models typically involves testing two non-nested hypotheses, that is hypotheses such that one cannot be obtained as a special or limiting case of the other. Cox (1961, 1962) proposed a classical testing procedure based on the comparison of the maximized likelihood functions for the two models. In this paper it is shown that such a procedure is not robust in that a single observation can reverse the decision. A robust version of Coxtype test statistics is proposed which can be used for the comparison of any parametric model. Its robustness properties as well as other properties are shown in simulated examples.
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