Nonnested alternative tests o If the models have the same dependent variables, but nonnested x's could still just make a giant model with the x's from both and test joint exclusion restrictions that lead to one model or the other An alternative. the Davidson -MacK innon test, uses y from one model as regressor in the second model and tests for significance Economics 20- Prof anderson 6Economics 20 - Prof. Anderson 6 Nonnested Alternative Tests If the models have the same dependent variables, but nonnested x’s could still just make a giant model with the x’s from both and test joint exclusion restrictions that lead to one model or the other An alternative, the Davidson-MacKinnon test, uses ŷ from one model as regressor in the second model and tests for significance