A REMARK ON HAUSMAN'S SPECIFICATION TEST.

The paper examines the power characteristics of the test procedure proposed by Hausman and compares them with those of the more conventional procedures. Hausman's test is derived from the maximum likelihood approach. Hausman's specification test is an asymptotic chi-square test based on the quadratic form obtained from the difference between a consistent estimator under the alternative hypothesis and an efficient estimator under the null hypothesis. The approach adopted by Hausman in discussing his procedure is not really suitable for a comparison with tests based on Wald principle, or Rao's efficient score, or the likelihood ratio principle.