A nonparametric threshold model with application to zero returns

Linton, O. (2008). A nonparametric threshold model with application to zero returns. Statistics and Its Interface, 1(2), 321-326.
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We propose a nonparametric censoring model for time series data. We propose an estimator of the censoring function based on extreme value regression. We obtain the pointwise distribution theory and suggest confidence intervals based on this theory. We use our model to explain the evolution of the frequency of zeros in stock index returns.

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