GlobalEnvelope function

Estimation of the global confidence interval of simulations

Calculates the global confidence interval envelope sensu Duranton and Overman (2005) according to simulations of the null hypothesis of a function.

GlobalEnvelope(Simulations, Alpha)

Arguments

• Simulations: An object of class fv, see fv.object, containing the simulated values.
• Alpha: The risk level.

Details

The global envelope is calculated by iteration: the simulations reaching one of the upper or lower values at any distance are eliminated at each step. The process is repeated until Alpha / Number of simulations simulations are dropped. The remaining upper and lower bounds at all distances constitute the global envelope. Interpolation is used if the exact ratio cannot be reached.

Returns

A matrix with two lines: - Glo: the lower bound of the envelope

• Ghi: the upper bound of the envelope

References

Duranton, G. and Overman, H. G. (2005). Testing for Localisation Using Micro-Geographic Data. Review of Economic Studies 72(4): 1077-1106.