Grouping Tests for Misspecification: An Application to Housing Demand

John S. Greenlees, Kimberly D. Zieschang
1984 Journal of business & economic statistics  
We consider several grouping tests for regression misspecification, with reference to housingdemand function estimation. We compare three existing test procedures, demonstrate modifications necessary in most applications, and propose a fourth test to distinguish between two categories of potential specification error. The test procedures are evaluated in artificial simulations of alterative errors. Finally, we apply the tests to FHA home purchase data. We reject the hypothesis that household
more » ... grouped regressions differ only by sampling error or random mismeasurement of household income or price. Our results have implications for choices among test procedures and interpretations of previous housing-demand analysis.
doi:10.2307/1391260 fatcat:3rn53bbjpvdrdm3cty4phrymhu