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A Simplified Condition For Quantile Regression

Published: April 26, 2025 | arXiv ID: 2504.18769v1

By: Liang Peng, Yongcheng Qi

Potential Business Impact:

Predicts financial risks more accurately.

Business Areas:
Predictive Analytics Artificial Intelligence, Data and Analytics, Software

Quantile regression is effective in modeling and inferring the conditional quantile given some predictors and has become popular in risk management due to wide applications of quantile-based risk measures. When forecasting risk for economic and financial variables, quantile regression has to account for heteroscedasticity, which raises the question of whether the identification condition on residuals in quantile regression is equivalent to one independent of heteroscedasticity. In this paper, we present some identification conditions under three probability models and use them to establish simplified conditions in quantile regression.

Page Count
12 pages

Category
Mathematics:
Statistics Theory