-The scope of this study is to present a complete statistical framework for model identification of wavelet neural networks (WN). In each step in WN construction we test various methods already proposed in literature. In the first part we compare four different methods for the initialization and construction of the WN. Next various information criteria as well as sampling techniques proposed in previous works were compared in order to derive an algorithm for selecting the correct topology of a WN. Finally, In variable significance testing the performance of various sensitivity and model-fitness criteria were examined and an algorithm for selecting the significant explanatory variables is presented.