Non-parametrical Estimation of the Regression used in Economic Analyses

Non-parametric methods are useful, but raises some problems. In practice, they require a large number of observations and are used for a relatively small number of explanatory variables. Moreover, the result is sensitive to the choice of the smoothing parameter and to a lesser extent in the nucleus. They pose a problem for the presentation of results that can not be contained in a compact formula but can only be described by graphs. A non-parametric analysis does not allow extrapolation outside the range of observation, but econometric is an advantage.