Specification test for binary choice models based on index quantiles (Q1314480)

For binary choice models a distance statistic is proposed, which defines a measure between parametric choice probabilities under the null hypothesis and a suitable nonparametric or semiparametric alternative. The paper establishes the asymptotic distribution of the statistic under the null hypothesis and obtains power results under local alternatives. The test statistics are applied to data on labor force participation decision of married women and the more powerful of the two test statistics detects departures from normality.