Econometrica: Jul 1966, Volume 34, Issue 3

Simplification of Economic Models

https://doi.org/0012-9682(196607)34:3<563:SOEM>2.0.CO;2-1
p. 563-584

Walter D. Fisher

A procedure is proposed for partitioning a given matrix columnwise into a simpler or smaller matrix so that a certain quadratic cost criterion involving another symmetric matrix is minimized. The procedure, involving progressive mergers of subsets of data, is applied to two economic examples from the literature.

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