Comparison between the Local Polynomial Kernel Method and cubic spline to Estimating Time-Varying Coefficients Model

Abstract

The research deals with the study of the varying coefficient model as well as the Time-Varying Coefficient Model because of their remarkable interest in recent years. Methods Two methods were used, local polynomial kernal method and the cubic spline method. The simulation method was used for comparison. Compared to three mathematical functions that represented the variable coefficients, different sample sizes, and different levels of the model's standard deviation, the cubic spline method was best.