Analysis of Error Structure for Additive Biomass Equations on the Use of Multivariate Likelihood Function

Research Highlights: this study developed additive biomass equations respectively from nonlinear regression (NLR) on original data and linear regression (LR) on a log-transformed scale by nonlinear seemingly unrelated regression (NSUR). To choose appropriate regression form, the error structures (additive vs. multiplicative) of compatible biomass equations were determined on the use of the multivariate likelihood function which extended the method of likelihood analysis to the general occasion of a contemporaneously correlated set of equations. Background and Objectives: both NLR and LR could yield the expected predictions for allometric scaling relationship. In recent studies, there are vigorous debates on which regression (NLR or LR) should apply. The main aim of this paper is to analyze the error structure of a compatible system of biomass equations to choose more appropriate regression. Materials and Methods: based on biomass data of 270 trees for three tree species, additive biomass equations were developed respectively for NLR and LR by NSUR. Multivariate likelihood functions were computed to determine the error structure based on the multivariate probability density function. The anti-log correction factor which kept the additive property was obtained separately using the arithmetic and weighted average of basic correction factors from each equation to assess two model specifications on the comparably original scale. Results: the assumption of additive error structure was well favored for an additive system of three species based on the joint likelihood function. However, the error structure of each component equation calculated from the conditional likelihood function for compatible equations might be different. The performance of additive equations corrected by a weighted average of basic correction factor from each component equation performed better than that of the arithmetic average and held good property of compatibility after corrected. Conclusions: NLR provided a better fit for additive biomass equations of three tree species. Additive equations which confirmed the responding assumption of error structure performed better. The joint likelihood function on the use of the multivariate likelihood function could be used to analyze the error structure of the additive system which was a result of a tradeoff for each component equation. Based on the average of correction factors from each component equation to correct the bias of additive equations was feasible for the hold of additive property, which might lead to a poor correction effect for some component equation.

MULTIVARIATE TREND–CYCLE EXTRACTION WITH THE HODRICK–PRESCOTT FILTER

The Hodrick–Prescott filter represents one of the most popular methods for trend–cycle extraction in macroeconomic time series. In this paper we provide a multivariate generalization of the Hodrick–Prescott filter, based on the seemingly unrelated time series approach. We first derive closed-form expressions linking the signal–noise matrix ratio to the parameters of the VARMA representation of the model. We then show that the parameters can be estimated using a recently introduced method, called “Moment Estimation Through Aggregation (META).” This method replaces traditional multivariate likelihood estimation with a procedure that requires estimating univariate processes only. This makes the estimation simpler, faster, and better behaved numerically. We prove that our estimation method is consistent and asymptotically normal distributed for the proposed framework. Finally, we present an empirical application focusing on the industrial production of several European countries.

Multivariate Likelihood Ratio Order for Skew-Symmetric Distributions with a Common Kernel

The multivariate likelihood ratio order comparison of skew-symmetric distributions with a common kernel is considered. Two multivariate likelihood ratio perturbation invariance properties are derived.

REVISITING MULTIVARIATE LIKELIHOOD RATIO ORDERING RESULTS FOR ORDER STATISTICS

In this article, we establish some results concerning the likelihood ratio order of random vectors of order statistics in the case of independent but not necessarily identically distributed observations and for the case of possible dependent observations. Applications of these results to provide comparisons of conditional order statistics are also given.

UNIVARIATE AND MULTIVARIATE LIKELIHOOD RATIO ORDERING OF GENERALIZED ORDER STATISTICS AND ASSOCIATED CONDITIONAL VARIABLES

In this article, we establish some results concerning the univariate and multivariate likelihood ratio order of generalized order statistics and the special case of m-generalized order statistics and their associated conditional variables. These results, in addition to being new, also generalizes some of the known results in the literature. Finally, some applications of all these results are indicated.