What to do when reviewer doesn't know stats?

[wtf]

What do you do when the reviewer of your article clearly does not understand statistics and makes comments that are plainly wrong, leading to a rejection (as opposed to r&r) and the editor seems to have gone along with them? The particular model I used (vecm) isn't really common in sociology and the reviewer made some pretty basic mistakes in criticizing it.

[Appeal]

You should appeal the decision - many journals accept appeals - and suggest potential reviewers who may be more familiar with your method.