help for frm_reset
-------------------------------------------------------------------------------

Title

    frm_reset -- RESET test for fractional regression models


Syntax

        frm_reset [anything] [, options]

    options                     Description
    -------------------------------------------------------------------------
    lastpower(#)                specify the maximum power of the linear
                                  predictor to be used in the RESET test
    lm                          specify the LM version of the RESET test to
                                  be performed
    wald                        specify the Wald version of the RESET test to
                                  be performed
    lr                          specify the LR version of the RESET test to
                                  be performed
    maximize_options            control the maximization process of the
                                  estimations required to perform Wald and LR
                                  tests
    -------------------------------------------------------------------------

    where anything, if provided, is the name under which estimation results
    were saved via estimates store. Otherwise, frm_reset is applied to the
    last estimation results, even if these were not already stored.


Description

    frm_reset applies the RESET test statistic to fractional regression
    models estimated via frm. frm_ptest may be used to test the link
    specification of: (i) one-part fractional regression models; (ii) the
    binary component of two-part fractional regression models; and (iii) the
    fractional component of two-part fractional regression models. See
    Ramalho, Ramalho and Murteira (2011) for details on the application of
    the RESET test in the fractional regression framework.


Options

    lastpower(#)} specify the maximum power of the linear predictor to be
        used in the RESET test. The default option is lastpower(3), which
        implies that two RESET statistics are computed, one using quadratic
        powers of the fitted values as test variable and the other
        considering quadratic and cubic powers of the fitted values as test
        variables.

    lm specifies that the LM version of the RESET test is to be performed.
        Unless the model to be tested is the binary component of a two-part
        fractional regression model, a robust version is implemented. This is
        the default option.

    wald specifies that the Wald version of the RESET test is to be
        performed. It may be implemented a standard, a robust or a cluster
        version of the Wald test, depending on how the base model was
        estimated.

    lr specifies that the LR version of the RESET test is to be performed.
        This option is only available for the binary component of a two-part
        fractional regression model.

    maximize_options:  technique(algorithm_spec), iterate(#), trace,
        difficult, gradient, showstep, hessian, showtolerance, tolerance(#),
        ltolerance(#), nrtolerance(#), from(init_specs); see [R] maximize for
        details.


Examples

    Setup - data used in Ramalho, Ramalho and Henriques (2010)
        . use http://evunix.uevora.pt/~jsr/stata/JPA-2010.dta

    Testing the logit specification of a standard fractional regression model
        . frm SCORE LANDLORD LIVESTOCK CROP SIZE SUBSIDIES ALTO CENTRAL BAIXO
        . frm_reset

    Testing probit and cloglog specifications of binary regression models
    using LR-based RESET tests with quadratic, cubic and fourth powers of the
    linear predictor
        . frm SCORE LANDLORD LIVESTOCK CROP SIZE SUBSIDIES ALTO CENTRAL
            BAIXO, m(2Pbin) linkb(probit) inf(1)
        . estimates store a1
        . frm SCORE LANDLORD LIVESTOCK CROP SIZE SUBSIDIES ALTO CENTRAL
            BAIXO, m(2Pbin) linkb(cloglog) inf(1)
        . estimates store a2
        . frm_reset a1, lr l(4)
        . frm_reset a2, lr l(4)


Saved results

    frm_reset saves results of the following type in r():

     Scalars       
      r(LM2)              LM-based RESET statistic that uses only quadratic
                            powers of the linear predictor as test variable
      r(LM2p)             p-value for the statistic r(LM2)

    If lastpower(#) is higher than 2, then r(LM3), r(LM3p), etc. are also
    saved. If Wald and LR versions of the RESET test are computed, then
    r(W2), r(LR2), etc. are also saved.


Author

    Joaquim J.S. Ramalho
    Department of Economics
    University of Evora
    Portugal
    jsr@uevora.pt


Remarks

    frm_reset is not an official Stata command. For further help and support,
    please contact the author. Please notice that this software is provided
    as is, without warranty of any kind, expressed or implied, including but
    not limited to the warranties of merchantability, fitness for a
    particular purpose, and noninfringement. In no event shall the author be
    liable for any claim, damages, or other liability, whether in an action
    of contract, tort, or otherwise, arising from, out of, or in connection
    with the software or the use or other dealings in the software.


References

    Ramalho, E.A., J.J.S. Ramalho and J.M.R. Murteira (2011), "Alternative
        estimating and testing empirical strategies for fractional regression
        models", Journal of Economic Surveys, 25(1), 19-68.

    Ramalho, E.A., J.J.S. Ramalho and P.D. Henriques (2010), "Fractional
        regression models for second stage DEA efficiency analyses", Journal
        of Productivity Analysis, 34(3), 239-255.


Also see