SUMMARIZING CURVATURE CONDITIONS FOR FLEXIBLE FUNCTIONAL FORMS

This article suggests that the two current approaches of summarizing curvature conditions for certain flexible function forms are neither intuitive nor robust to skewed distribution of exogenous variables. They also ignore the possible correlation pattern between exogenous variables. Arguing that the purpose of summarizing curvature condition is to provide either the changes of aggregated dependent variable with respect to a change of explanatory variable, or curvature conditions of a representative individual, this article proposes two methods to address this issue.