Providing intuition to the Fieller Methodwith two geometric representationsusing STATA and Eviews
AuthorHirschberg, J. G.; Lye, J. N.
AffiliationEconomics and Commerce: Department of Economics
CitationsHirschberg, J. G. and Lye, J. N. (2007) Providing intuition to the Fieller Methodwith two geometric representationsusing STATA and Eviews.
Access StatusOpen Access
Research paper no. 992, ISBN 0 7340 2650 1
The Fieller Method for the construction of confidence intervals for ratios of the expectedvalue of two normally distributed random variables has been shown by a number of authorsto be a superior method to the delta approximation. However, it is not widely used due inpart, to the tendency to present the intervals only in a formula context. In addition, potentialusers have been deterred by the potential difficulty in interpreting non-finite confidenceintervals when the confidence level is less than 100%. In this paper we present two graphicalmethods which can be easily constructed using two widely used statistical software packages(Eviews and Stata) for the representation of the Fieller intervals. An application is presentedto assess the results of a model of the non-accelerating inflation rate of unemployment(NAIRU).
KeywordsKey words: Fieller method; ratios of parameters; confidence interval; confidence ellipsoid; 1st derivative function; NAIRU; Eviews; STATA C12 - Hypothesis Testing; C20 - General; E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution
- Click on "Export Reference in RIS Format" and choose "open with... Endnote".
- Click on "Export Reference in RIS Format". Login to Refworks, go to References => Import References