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My data set contains 55 data points. I want to run a structural break tests. I am using Eviews 8 and I know that I am supposed to estimate an equation using Quick->Estimate, then once it is estimated, click on View->Structural Diagnostics->Multiple Breakpoint test.

However I am confused as to which equation should i estimate before knowing the break date?

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closed as off-topic by Jeremy Miles, Michael Chernick, kjetil b halvorsen, gung Aug 8 '18 at 14:56

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First look at the plot of your time series data to have an idea about break point.

  • If there seems to be a single structural break (also require literature support), you can test it by using 'Chow breakpoint test' and if there seems to be multiple structural breaks (also require literature support), you can test the exact breakpoint by using 'Bai-Perron muliple breakpoint test'.

In Eviews, the following steps can be followed:

  • Select data - view - graph - basic graph - line & symbol - OK
  • Visualize, if there is any break point. At what time is it present (rough estimate)
  • quick - estimate equation - enter your equation - Ok
  • View - stability diagnostic - Chow breakpoint test (if single break) - enter date (which you've taken from graph) - click ok - interpret the result
    • View - stability diagnostic - multiple breakpoint test (if more than one break) - select method, maximum breaks(which you've taken from graph), trimming % and sig level as per your requirement - click ok - interpret the result
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