<s>
The	O
Durbin	B-General_Concept
–	I-General_Concept
Wu	I-General_Concept
–	I-General_Concept
Hausman	I-General_Concept
test	I-General_Concept
(	O
also	O
called	O
Hausman	B-General_Concept
specification	I-General_Concept
test	I-General_Concept
)	O
is	O
a	O
statistical	O
hypothesis	O
test	O
in	O
econometrics	O
named	O
after	O
James	O
Durbin	O
,	O
De-Min	O
Wu	O
,	O
and	O
Jerry	O
A	O
.	O
Hausman	O
.	O
</s>
<s>
Under	O
the	O
null	B-General_Concept
hypothesis	I-General_Concept
,	O
both	O
of	O
these	O
estimators	O
are	O
consistent	O
,	O
but	O
b1	O
is	O
efficient	O
(	O
has	O
the	O
smallest	O
asymptotic	O
variance	O
)	O
,	O
at	O
least	O
in	O
the	O
class	O
of	O
estimators	O
containing	O
b0	O
.	O
</s>
<s>
Under	O
the	O
alternative	B-General_Concept
hypothesis	I-General_Concept
,	O
b0	O
is	O
consistent	O
,	O
whereas	O
b1	O
is	O
n't	O
.	O
</s>
<s>
Under	O
the	O
null	B-General_Concept
hypothesis	I-General_Concept
,	O
this	O
statistic	O
has	O
asymptotically	O
the	O
chi-squared	O
distribution	O
with	O
the	O
number	O
of	O
degrees	O
of	O
freedom	O
equal	O
to	O
the	O
rank	O
of	O
matrix	O
.	O
</s>
<s>
If	O
we	O
reject	O
the	O
null	B-General_Concept
hypothesis	I-General_Concept
,	O
it	O
means	O
that	O
b1	O
is	O
inconsistent	O
.	O
</s>
<s>
This	O
test	O
can	O
be	O
used	O
to	O
check	O
for	O
the	O
endogeneity	O
of	O
a	O
variable	O
(	O
by	O
comparing	O
instrumental	O
variable	O
(	O
IV	O
)	O
estimates	O
to	O
ordinary	B-General_Concept
least	I-General_Concept
squares	I-General_Concept
(	O
OLS	O
)	O
estimates	O
)	O
.	O
</s>
<s>
The	O
Hausman	B-General_Concept
test	I-General_Concept
can	O
be	O
used	O
to	O
differentiate	O
between	O
fixed	B-General_Concept
effects	I-General_Concept
model	I-General_Concept
and	O
random	B-General_Concept
effects	I-General_Concept
model	I-General_Concept
in	O
panel	O
analysis	O
.	O
</s>
<s>
In	O
this	O
case	O
,	O
Random	B-General_Concept
effects	I-General_Concept
(	O
RE	O
)	O
is	O
preferred	O
under	O
the	O
null	B-General_Concept
hypothesis	I-General_Concept
due	O
to	O
higher	O
efficiency	O
,	O
while	O
under	O
the	O
alternative	O
Fixed	B-General_Concept
effects	I-General_Concept
(	O
FE	O
)	O
is	O
at	O
least	O
as	O
consistent	O
and	O
thus	O
preferred	O
.	O
</s>
