econ.EM · 2026-08-04 · No. 74
Econometrics, 2026-08-04.
1 new papers in econ.EM. Titles, authors,
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01 — The papers
1 entries-
01
A Simple Approximation to the Distribution of the Ridge Regression Estimator
José Luis Montiel Olea, Ryan Strong, Amilcar Velez, Zhuoheng Xu, Haomin Yu
econ.EM · cs.LG · math.ST
We present a simple Gaussian approximation to the finite-sample distribution of the classical ridge regression estimator. Our approximation captures the fact that, in finite samples, the ridge regression estimator trades off bias and variance to reduce estimation and prediction error. Our approximation is based on nonstandard asymptotics where $i)$ we let the estimator's regularization parameter grow proportionally to the sample size; and...
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