Last week I discussed U-shaped relationships, and how to test for them. This week, I would like to discuss higher-order nonlinear relationship, or relationships that are “more nonlinear” than U-shaped relationships.
There are many ways one can approach the estimation of nonlinear relationships. I will focus only on a handful of them in this post, from least to most nonlinear, and from semiparametric to nonparametric.
A good first step beyond the estimation of a U-shaped relationship would be to estimate the equation