Statistical Process Control

In this section, we consider quality control procedures for a production process whereby goods are manufactured continuously. On the basis of sampling and inspection of produc­tion output, a decision will be made to either continue the production process or adjust it to bring the items or goods being produced up to acceptable quality standards.

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Acceptance Sampling

In acceptance sampling, the items of interest can be incoming shipments of raw materi­als or purchased parts as well as finished goods from final assembly. Suppose we want to decide whether to accept or reject a group of items on the basis of specified quality characteristics. In quality control terminology, the group of items

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Model Selection Strategy in Modern Panel Data Econometrics

This post outlines a comprehensive framework for model selection, estimation, and validation in modern panel-data econometrics. Rather than treating panel-data analysis as a simple choice between fixed-effects and random-effects estimators, the framework views model selection as a sequential process driven by the statistical properties of the underlying data-generating process. The proposed approach integrates key diagnostic procedures, including tests for cross-sectional dependence, panel unit roots, structural breaks, slope heterogeneity, cointegration, and endogeneity, to identify the set of econometrically admissible estimators. The framework further examines the theoretical foundations, assumptions, advantages, and limitations of major panel-data estimators, including static panel models, instrumental-variable approaches,