Elsevier

Economics Letters

Volume 115, Issue 2, May 2012, Pages 256-257
Economics Letters

Set coverage and robust policy

https://doi.org/10.1016/j.econlet.2011.12.071Get rights and content

Abstract

We show that confidence regions covering the identified set may be preferable to confidence regions covering each of its points in robust control applications.

Highlights

► We consider robust control applications of partial identification. ► Coverage of the identified set may be preferable to coverage of each of its points. ► Decisions based on confidence regions covering the identified set are close to optimal. ► Decisions based on confidence regions covering each of its points may be far from optimal.

Section snippets

Acknowledgments

Financial support from SSHRC Grant410-2010-242 is gratefully acknowledged. We also thank Badi Baltagi and an anonymous referee for helpful comments.

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