Comparison of Test Statistics in the Ridge Probit Regression Model: Simulation and Application

Abstract Number:

3427 

Submission Type:

Contributed Abstract 

Contributed Abstract Type:

Speed 

Participants:

Sergio Perez Melo (1), Zoran Bursac (1), BM Golam Kibria (1)

Institutions:

(1) Florida International University, Miami, FL

Co-Author(s):

Zoran Bursac  
Florida International University
BM Golam Kibria  
Florida International University

First Author:

Sergio Perez Melo  
Florida International University

Presenting Author:

Sergio Perez Melo  
N/A

Abstract Text:

Ridge regression is a method that has been proposed to solve the multicollinearity problem in both linear and non-linear regression models. This paper studies different Ridge regression z-type tests of the individual coefficients for the Probit regression model. A simulation study was conducted to evaluate and compare the performance of the test statistics with respect to their empirical size and power under different simulation conditions. Our simulations identified which of the proposed tests maintain type I error rates close to the 5% nominal level while simultaneously showing gains in statistical power over the standard Wald z-test commonly used in Probit regression models. Our paper is the first of its kind to compare z-type tests for these different shrinkage approaches to estimation in Probit Ridge regression. The results will be valuable for applied statisticians and researchers in the area of regression models.

Keywords:

Poisson regression|Ridge regression|Liu regression|Kibria-Lukman regression|Empirical power|Type I error rate

Sponsors:

Biometrics Section

Tracks:

Categorical Data

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